Freddie Mac agreed last month to stop making new bets against American homeowners after its regulator, the Federal Housing Finance Agency, raised concerns, according to a statement  the agency issued late Monday. Freddie, the taxpayer-owned mortgage giant, still retains $5 billion worth of such bets.
The agency, responding to an investigation by ProPublica  and NPR , said it had "identified concerns regarding the controls, including risk management, surrounding the inverse floaters," as the investments at issue are known. The agency did not specify what it had found, but said Freddie agreed in December that "these transactions would not resume pending completion of [FHFA's] examination work." The statement also said that Freddie had ceased making the deals earlier in 2011 but did not explain why.
Separately, the White House said the Department of the Treasury is "looking into" Freddie's investments, and at least three senators called on Freddie not to bet against struggling homeowners.
The mortgage-insurance company bought billions worth of complex mortgage-backed securities that profit if borrowers stay trapped in high interest rate home loans. The $5 billion figure released Monday afternoon is more than had been reported in the ProPublica-NPR investigation.