Report Criticizes Housing Regulator on Mortgage Servicing
A federal housing regulator hasn’t done enough to oversee mortgage-servicing companies used by Fannie Mae and Freddie Mac to collect payments on home loans despite widespread attention to problems in the industry, a federal watchdog said Wednesday.
The Federal Housing Finance Agency, which oversees the government-controlled mortgage-finance giants, has been trying to step up its scrutiny of the mortgage servicers used by Fannie and Freddie in the wake of revelations that bank employees and law firms filed legal documents used in foreclosure without a proper review.
The report focused on Freddie Mac’s oversight of servicers, rather than Fannie Mae’s. It noted that Freddie Mac developed a business plan last year to manage higher-risk loans, but said it should apply to all mortgage servicers, not just the largest ones.
The FHFA’s inspector general, in the report, says the agency “has not issued sufficient regulations or guidance” covering Fannie and Freddie’s use of mortgage servicers.
Copy of the report below…