There is a little-known yet important government agency that provides useful information to the foreclosure investor. The Office of Federal Housing Enterprise Oversight (OFHEO) was established as an independent entity within the Department of Housing and Urban Development by the Federal Housing Enterprises Financial Safety and Soundness Act of 1992.

OFHEO's mission is to promote housing and a strong national housing finance system by ensuring the safety and soundness of Fannie Mae (Federal National Mortgage Association) and Freddie Mac (Federal Home Loan Mortgage Corporation). OFHEO works to ensure the capital adequacy and financial safety and soundness of the two housing government-sponsored enterprises (GSEs).

Fannie Mae and Freddie Mac are the nation's largest housing finance institutions. They buy mortgages from commercial banks, thrift institutions, mortgage banks, and other primary lenders and either hold these mortgages in their own portfolios or package them into mortgage-backed securities for resale to investors. These secondary mortgage market operations play a major role in creating a ready supply of mortgage funds for American homebuyers.

Fannie Mae and Freddie Mac are congressionally chartered, publicly owned corporations whose shares are listed on the New York Stock Exchange. Under terms of their GSE charters, they are exempt from state and local taxation and from registration requirements of the Securities and Exchange Commission. Each firm has a backup credit line with the U.S. Treasury. OFHEO's responsibilities include oversight of both Fannie Mae and Freddie Mac.

As part of their work, OFHEO issues comprehensive reports and statistical information. One particularly useful report is the OFHEO House Price Index (HPI). It is designed to measure changes in the value of single-family homes in the United States. The HPI also includes information about the various regions of the country, in the individual states, and the District of Columbia. The HPI is published quarterly by OFHEO using data provided by Fannie Mae and Freddie Mac. It generally is about eighty-plus pages of information.

A free copy of the report is available online at www.ofheo.gov/HPI.asp. Table 10-1, produced from information from the OFHEO quarterly report, shows how housing prices are moving in the states.

TABLE 10-1 Percent Change in House Prices through Q3 2006