FHFA’s Oversight of the Enterprises’ Management of High-Risk Seller/Servicers

In accordance with the Housing and Economic Recovery Act of 2008 (HERA), which amended the Inspector General Act of 1978, FHFA-OIG is authorized to conduct audits, evaluations, investigations, and other law enforcement activities pertaining to FHFA’s programs and operations.1 FHFA-OIG is also authorized to recommend policies that promote economy and efficiency, and to prevent and detect fraud and abuse.

This audit report is in furtherance of FHFA-OIG’s mission to promote the economy, efficiency, and effectiveness of FHFA’s programs and operations, and, in accordance with FHFA-OIG’s first strategic goal, it adds value by helping the Agency improve the Enterprises’ economic health. Specifically, the report is intended to strengthen FHFA’s oversight of how the Enterprises protect themselves from high-risk and high-volume counterparties that sell and/or service mortgage loans. Doing business with such counterparties increases the Enterprises’ risk of financial loss, which in turn can lead to their need to draw more taxpayer support from the U.S. Department of the Treasury.2 This report identifies ways that FHFA can protect the taxpayers’ investment better by helping the Enterprises manage their risks better.

FHFA-OIG appreciates the cooperation of everyone who contributed to the audit, including officials at Fannie Mae, Freddie Mac, and FHFA. This audit was led by Heath Wolfe, Assistant Inspector General for Audits, who was assisted by Andrew W. Smith, Auditor-in-Charge.

Full report below…

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4closureFraud.org

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FHFA’s Oversight of the Enterprises’ Management of High-Risk Seller/Servicers