The Department of Housing and Urban Development is launching a review of Fannie Mae's and Freddie Mac's investment portfolios to see if the GSEs' nonmortgage investments are consistent with their housing mission."[T]he Department will soon initiate a review of Freddie Mae and Freddie Mac investments and holdings, including certain equity and debt investments, with a focus on transactions classified on their financial statements as 'other assets/other liabilities'," HUD Secretary Alphonso Jackson said in a speech to a congressional caucus. The secretary complained about a lack of disclosure and transparency surrounding these investments. "Increased regulatory awareness of investment activity is of particular concern where the transactions have no transparency on a GSE financial statement," Secretary Jackson said. In the mid-1990s, Freddie came under congressional scrutiny for its investments in tobacco bonds and was pressured into selling the bonds. HUD proposed a rule to limit the nonmortgage investments of the two government-sponsored enterprises. But after several years of inaction, HUD withdrew the proposal.

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