The FHFA Inspector General investigation into Freddie Mac inverse floaters has come up positive for the government-sponsored enterprise.
"FHFA-OIG uncovered no evidence that FHFA or Freddie Mac obstructed homeowners’ abilities to refinance their mortgages in an effort to influence the yields of the inverse floating-rate bonds that the Enterprise retained in its investment portfolio," reads the results of the investigation.
ProPublica and NPR went on a coordinated tear against the GSE, back in January. The articles on inverse floaters landed the self-fulfilled reporters television spots, even though interviews with HousingWire (me) were categorically declined. Without proof, I referred to the investigation as an "investigation."
The joint investigation was part of a larger effort to undermine the nation's housing finance.
Now the FHFA concludes, as had the rest of us months ago, that it was much ado about nothing.
"Inverse floaters represent a small portion of Freddie Mac’s capital markets portfolio," reads the report. "To the extent that a tension exists between Freddie Mac’s refinancing and investment policies, inverse floaters are no more likely to adversely impact mortgage holders or discourage borrower refinancing than any of the mortgages or other assets that Freddie Mac holds for investment."
ProPublica and NPR are hardly licking their wounds. In fact, ProPublica in particular remains incredulous and defiant.
ProPublica's Cora Currier writes: "The inspector general did not independently evaluate Freddie’s hedging strategies. When ProPublica and NPR first reported on these deals, it was unclear what kind of hedging, if any, Freddie Mac had performed."
And yet, we’ve also seen no proof of the investigation methodology employed by these press outlets in this case. We have no clear understanding of how these journalists went about drawing their conclusions — if those with knowledge of inverse floaters were the ones who actually reviewed these products.
We will never know because the research process remains clouded and behind locked doors. It's easy to criticize the FHFA investigation, and hard to open the window on yours for the same possible criticism. So, as of now, the sanctimony of these press outlets remains unaccounted for.
So what are we left with?
Well, we do have the scope of how unnecessarily damaging their reporting was. And how those damaged relationships remain.