Time to shut down the Office of Federal Housing Enterprise Oversight

The Office of Federal Housing Enterprise Oversight proudly proclaims the following on its web site:

Our Mission: To promote housing and a strong national housing finance system by ensuring the safety and soundness of Fannie Mae and Freddie Mac.

Just in case they take it down, here’s a screenshot, taken just a moment ago:

Office of Federal Housing Enterprise Oversight -- their mission

Still not convinced of their mission? From their Supervision & Regulations page:

The Federal Housing Enterprises Safety and Soundness Act of 1992 gives OFHEO a broad range of supervisory tools that the agency may employ not only to address Enterprise problems in a remedial fashion but also to take actions to prevent such problems from developing. The agency’s use of those authorities helps mitigate systemic risk by reducing the risk of failure of Fannie Mae and Freddie Mac.

The organization was created in 1992 as part of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992. The annual budget in 2008 was $66 million, according to allgov.com. In 2003, it was just under $30 million. That’s at least $216 million to keep this woefully ineffective agency running over the past six years.

With so many people screaming for the firing of corporate CEOs (and others) for their alleged roles in the mortgage crisis, shouldn’t we also fire the entire staff of the agency that was responsible for overseeing the government agency which is arguably at the center of the problem?

Alas, this isn’t the solution decided by our elected officials… Instead, they take this agency and another (the Federal Housing Finance Board) and combine them to form a new agency, the Federal Housing Finance Agency.

How is it that a failed oversight and regulation agency gets rewarded by a merger into a yet larger oversight and regulation agency with more “legal and regulatory authority”?

Einstein quipped that an insane mind is one that does the same thing and expects different results. I’ll let you draw the conclusions.

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