By Diane Kittower. After months of pressure and criticism, Fannie Mae and Freddie Mac have agreed to change the way they report on their common stock. The lenders had been legally exempted from the Securities and Exchange Commission (SEC) disclosure requirements for public companies; now, the two secondary-mortgage-market giants will voluntarily abide by SEC rules concerning stock. "This takes that accusation [of inadequate disclosure] off the table," says Sharon McHale, Freddie Mac's director of public relations. Quarterly and annual statements like those of public companies traditionally under SEC regulation will be filed from now on, covering essentially the same information previously provided but in a different format.
Of potentially greater significance is a new study on the disclosure of mortgage-backed securities. As part of the July agreement, the SEC, the Treasury, and the Office of Federal Housing Enterprise Oversight (OFHEO) — which oversees Fannie and Freddie — will begin considering whether there is a need for changes in disclosures for all mortgage-backed securities. That study should be wrapped up early next year, says Peter Brereton, OFHEO associate director for external relations.
Published in BIG BUILDER Magazine, September 2002