Industry News

Fannie and Freddie haven’t put past behind them

Regulators say reform efforts limit GSEs' ability to cope with change

Government-sponsored mortgage repurchasers Fannie Mae and Freddie Mac are making progress correcting problems that led to accounting and management scandals, but remain "a significant supervisory concern," regulators said in their annual report to Congress. Fannie's and Freddie's continued efforts to fix internal control and systems problems are hindering their ability to respond to changes in the market, including the demand for new loan products, the report by the Office of Federal Housing Enterprise Oversight (OFHEO) said. OFHEO Director James Lockhart noted the government-sponsored entities (GSEs) haven't reached a key milestone indicating that they've put their problems behind them: a return to timely filing of financial statements with the Securities and Exchange Commission. "I am pleased to report that both companies are working hard to achieve this goal, but they still have much to do," Lockhart said in a letter to members of the House Committee on Financial Services and the ...