Government lacks staff to oversee mortgage companies, according to report

New York /
Sep.September 23, 2011 11:18 AM

The government does not have enough staff to to properly oversee
Fannie Mae and Freddie Mac,
and the investigations of the two mortgage companies are therefore not
as extensive as they should be, Bloomberg News reported. The Federal
Housing Finance Agency has not met its hiring targets, and even once
it does, it still will not have enough staff to do its tasks,
according to a report by FHFA’s Office of Inspector General.

Even though foreclosures have increased significantly, leading to
large growth in Fannie Mae’s inventory, “FHFA has yet to conduct a
targeted examination” of how the companies manage repossessed homes,
known as real estate owned properties, or REOs, the report says. The
report also criticizes the agency for failing to scrutinize the
companies’ outside law firms until late last year, after evidence of
false legal documents led most mortgage companies to suspend
foreclosures.

FHFA this year intended to hire 26 people to join its team of
about 120 examiners. But even when those hires are completed, agency
executives said they will have only about half the examiners they
need.

Stephen Cross, deputy director of FHFA , said the agency has
hired 18 examiners since January. He added that there is no evidence
that FHFA has not fulfilled its obligations, and noted that the
report relied on interviews with unnamed FHFA staff. In a separate
report released today, the inspector general also blamed FHFA for
not forcing Fannie Mae to quickly adopt internal risk controls. Better
controls could have alerted the company to the robo-signing
foreclosure scandal sooner
, the report found.
[Bloomberg]


Related Articles

arrow_forward_ios
From left: Fannie Mae's Hugh Frater and Freddie Mac's Michael DeVito
Government to back home loans over $1M
Government to back home loans over $1M
Appraisal gap worsened
Appraisal gap worsened as racial disparity persists
Appraisal gap worsened as racial disparity persists
Residential Real Estate, Housing Market, Fannie Mae
Sentiment sinks deeper as market sidelines buyers and sellers
Sentiment sinks deeper as market sidelines buyers and sellers
Equifax CEO Mark Begor (Photo Illustration by Steven Dilakian for The Real Deal with Getty Images)
Equifax error might have harmed (or helped) mortgage applicants
Equifax error might have harmed (or helped) mortgage applicants
314 Wilson Avenue in Bushwick, Pennrose Holdings' Mark Dambly (Pennrose Holdings, Hope Gardens)
Pennrose, Acacia land $117M Freddie Mac loan in Bushwick
Pennrose, Acacia land $117M Freddie Mac loan in Bushwick
(iStock)
Mortgage rates falling back toward 5%
Mortgage rates falling back toward 5%
Fannie Mae's Doug Duncan (Fannie Mae, iStock)
Optimism continues slide among would-be homebuyers
Optimism continues slide among would-be homebuyers
A photo illustration of a crystal ball predicting future home prices (iStock)
Home sales, building to slow: Fannie Mae
Home sales, building to slow: Fannie Mae
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...