Insomniactive

With the passage of today’s legislation, as nearly as anyone can tell, the Office of Housing Enterprise oversight goes the way of the dodo, and is repaced by the newly created Federal Housing Finance Agency. The FHFA has been in the legislative works since early last year, and will also subsume the Federal Housing Finance Board. The Director of OFHEO, James Lockhart (did we ever hear a peep from this chap as FM2 were melting down?), purports to be just dandy with the demise of his agency. In a release today, he said:

I congratulate and thank Members of the House and Senate on final passage of a sound and comprehensive GSE regulatory reform bill. These provisions will go a long way toward restoring confidence in the housing markets by creating a new, stronger regulator with all the necessary tools to oversee Fannie Mae, Freddie Mac and the Federal Home Loan Banks. OFHEO is ready to move forward quickly as part of the new Federal Housing Finance Agency, created by this bill.”

The one-paragraph release is followed by what appears to be agency boilerplate that clearly slipped past the irony police:

OFHEO’s mission is to promote housing and a strong national housing finance system by ensuring the safety and soundness of Fannie Mae and Freddie Mac

But before OFHEO’s non-entity status becomes official, it seems pertinent to ask if said status hasn’t been de facto for quite some time.

The OFHEO 2007 annual report makes for entertaining reading. One particularly ripe example:

This year, OFHEO set for itself eight annual performance goals to reach these strategic goals and four annual performance goals to support its resource management strategy. To measure results in achieving goals, there were 34 performance measures for fiscal year 2007, 97 percent of which were achieved or substantially achieved.

Now as it turns out, OFHEO had already admitted that it wasn’t up to the task. In his introduction to the report, Director Lockhart says as much:

The year 2007 also saw progress by the Enterprises toward correcting their problems, but more needs to be done. In addition, as their internal problems that have lasted for many years and this year’s market turbulence and growing credit losses point out, there is a pressing need for a stronger regulator

In fact, his introductory letter reads like one long bitch session that he hasn’t had the authority to do his job.

He certainly wasn’t short on resources. As of the date of the report, OFHEO had 236 people, and were recruiting to fill 40 vacancies created by funding uncertainty, whatever that means. Its 2007 budget was $63 million; that’s $267k per year head, which either means that OFHEOers are well compensated or that they use a lot of post-it notes. Its organization chart looks like something from the “how not to ” chapter of an organizational behavior textbook. OFHEO had a director, a deputy director, and executive director, and then fifteen departments, or “offices.” Even so, the report makes sure to point out that

OFHEO’s operations are structured efficiently to accomplish its mission with a relatively small staff.

Right. No wonder they whiffed on that one performance measure-they were understaffed!!

Does anyone know anything about the Federal Housing Finance Agency that was born today? Why do i have this uneasy feeling the pit of my stomach?

Its charter is here

http://www.house.gov/apps/list/press/financialsvcs_dem/hr1427summary030907.pdf

but I couldn’t find my Fedspeak to English dictionary. If it really does exist, it is in hiding from the Internet. In cruising around the web, I *was* able to determine that the FHFA of which we speak should be under no circumstances be confused with other FHFA’s which have preceded it, including:

-Floriday Home Furnishings Association

-Fairly Homogenous Farming Area, and my personal favorite

-Foot Health Foundation of America.

But that was pretty much it. Maybe all 236 of those people were zombies who just returned to the grave.

UPDATE: Here’s a summary of the bill from the Conservative Reader

http://tinyurl.com/billsum