HUD will not penalize Fannie Mae or Freddie Mac for failing to meeting two 2007 affordable housing subgoals because of housing market declines. The government-sponsored enterprises (GSEs) met or exceeded their other affordable housing goals for 2007, according to performance figures announced by HUD. In April 24 letters to Daniel Mudd, Fannie Mae president and chief executive officer, and Richard Syron, Freddie Mac chairman and chief executive officer, HUD Assistant Secretary for Housing-Federal Housing Commissioner Brian Montgomery said HUD found "a substantial probability" that neither company would be able to meet the low- and moderate-income home purchase subgoal and the special affordable home purchase subgoal. According to HUD's letters, economic conditions in the latter half of 2007 "were not conducive to producing the number of subgoals-qualifying mortgages originally anticipated." The department noted that turmoil in the home mortgage market prompted lenders and mortgage insurers to tighten underwriting standards, reducing the availability of ''traditionally goal-rich high loan-to-value ratio home purchase loans."
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