What agency was created by the Housing and Economic Recovery Act (HERA)?

What agency was created by the Housing and Economic Recovery Act (HERA)?

• A. Federal Housing Finance Agency
• B. Federal Reserve Board
• C. Office of Housing Oversight
• D. Department of Housing and Urban Development

Answer: (A)

The Housing and Economic Recovery Act established the Federal Housing Finance Agency as the single regulator for the housing government-sponsored enterprises. This means FHFA was created to oversee Fannie Mae, Freddie Mac, and the Federal Home Loan Banks, with authority to set safety and soundness standards, regulate their activities, and step in as conservator or receiver if a GSE encounters serious trouble. The move shifted oversight from the previous arrangement, consolidating regulatory power in an independent agency specifically focused on maintaining the stability of the housing finance system during the crisis.

The Housing and Economic Recovery Act established the Federal Housing Finance Agency as the single regulator for the housing government-sponsored enterprises. This means FHFA was created to oversee Fannie Mae, Freddie Mac, and the Federal Home Loan Banks, with authority to set safety and soundness standards, regulate their activities, and step in as conservator or receiver if a GSE encounters serious trouble. The move shifted oversight from the previous arrangement, consolidating regulatory power in an independent agency specifically focused on maintaining the stability of the housing finance system during the crisis.