Federal Housing Enterprises

HUD's Implementation of Its Mission Oversight Needs to Be Strengthened Gao ID: T-GGD-98-177 July 30, 1998

This testimony summarizes a July 1998 report (GAO/GGD-98-173) which discusses the Department of Housing and Urban Development's (HUD) housing mission oversight of the two largest government-sponsored housing enterprises: the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation. GAO found that (1) HUD adopted a generally conservative approach in 1995 to setting the final housing goals for 1996 through 1999 that placed a high priority on maintaining the enterprises' financial soundness and (2) Fannie Mae and Freddie Mac complied with the final housing goals in 1996 and 1997, according to data they submitted to HUD. GAO also found several weaknesses in HUD's mission oversight. Specifically, HUD has not implemented a program to assess the accuracy of their data on compliance with their housing goals, HUD's research agenda does not address several issues necessary to fully understand the extent to which the housing goals promote housing opportunities, and the agency has not yet fully implemented a process under its general regulatory and new mortgage program approval authorities to ensure that the enterprises' financial activities are consistent with their housing mission.

GAO noted that: (1) HUD adopted a generally conservative approach in 1995 to setting the final enterprise housing goals for 1996 through 1999 that placed a high priority on maintaining the enterprises' financial soundness; (2) Fannie Mae and Freddie Mac were in compliance with the final housing goals in 1996 and 1997, according to data the enterprises submitted to HUD; (3) GAO also concluded that there are several weaknesses in HUD's mission oversight that need to be addressed; and (4) specifically: (a) HUD has not implemented a program to assess the accuracy of the enterprises' housing goal-compliance data; (b) HUD's research agenda does not address several issues necessary to fully understand the extent to which the housing goals promote housing opportunities; and (c) HUD has not yet fully implemented a process under its general regulatory and new mortgage program approval authorities to ensure that the enterprises' financial activities are consistent with their housing mission.



The Justia Government Accountability Office site republishes public reports retrieved from the U.S. GAO These reports should not be considered official, and do not necessarily reflect the views of Justia.