Conservatorship

Conservatorship is a legal procedure for the management of financial institutions for an interim period during which the institution’s conservator assumes responsibility for operating the institution and conserving its assets. Under the Housing and Economic Recovery Act of 2008, the Federal Housing Finance Agency (“FHFA”) placed Fannie Mae and Freddie Mac (collectively the “Enterprises”) into conservatorships. The statutory role of FHFA as conservator requires FHFA to take actions to preserve and conserve the assets of the Enterprises and restore them to safety and soundness. FHFA assumed the powers of the board of directors, officers, and shareholders; however, the day-to-day operations of the company are still with the Enterprises’ existing management.

Legal right given to a person to manage the property and financial affairs of a person deemed incapable of doing that for himself or herself. See guardianship.