This story appeared in Bank Digest.
The Federal Housing Finance Agency’s Office of Inspector General has issued the results of a performance audit that assessed the FHFA's oversight of Fannie Mae's policies, procedures, and practices with respect to the selection and administration of investors participating in the REO Pilot Program. OIG found that Fannie Mae's bidder qualification contractor did not fully comply with important provisions of the established process. Additionally, Fannie Mae did not always follow its contractor's scores and recommendations. FHFA also has not clarified several goals that are applicable to the REO Pilot Program. Specifically, FHFA has not clarified how the goals and objectives of the pilot program will be achieved, or how the agency intends to monitor and assess the performance of the pilot or any other future initiatives under the overall REO disposition program. In particular, FHFA has not prepared a program plan to guide its REO disposition-related initiatives. OIG indicated that such planning is important to provide the oversight needed to ensure proper disposition of Fannie Mae's extensive REO inventory.