According to a new report issued by the FHFA Office of the Inspector General (OIG), the FHFA failed to properly implement regulations that govern servicer oversight, nor has it paid proper attention to servicing abuses identified by other federal regulatory agencies. The OIG report notes that the FHFA was aware of Freddie Mac's problematic relationship with servicers in 2008, but did not address the issue until August 2010.
‘Documentation provided by Freddie Mac strongly suggests that weak servicer oversight and risk management played a significant role in the unsatisfactory performance,’ says the report, which was authored by FHFA Deputy Inspector Russell A. Rau. ‘In light of these control deficiencies, FHFA is not assured that the risk associated with Freddie Mac's servicing operations is being sufficiently managed.’
The OIG report also recommends that Freddie Mac set consistent loss mitigation goals for its 1,457 servicers. The full 44-page report is available online.