WEDNESDAY, APRIL 6 2005 could go down as a momentous day in the history of the US Government Sponsored Enterprises. Armando Falcon, Jr, the departing director of the Office of Federal Housing Enterprise Oversight (OFHEO), told a congressional hearing that Fannie Mae employees had falsified signatures on accounting transactions to help meet earnings targets. The previous day, Federal Reserve chairman Alan Greenspan had told the Senate banking committee that Freddie Mac and Fannie Mae's mortgage and MBS portfolios should be reduced. Agency-watchers in and around Washington, DC, sensed that the on-off assault on the two major housing GSEs was reaching its climax.
So you might expect the atmosphere at what, by volume of debt issued, is becoming the largest GSE, to be tense. But it's not. At the office of finance of the Federal Home Loan Banks in the Washington, DC, suburb of Reston, Virginia, all is calm.
"Regulatory reform...
