FHFA’S Supervision of Freddie Mac’s Control Over Mortgage Servicing Contractors

PREFACE

FHFA-OIG was established by HERA,1 which amended the Inspector General Act of 1978.2 FHFA-OIG is authorized to conduct audits, investigations, and other activities of the programs and operations of FHFA; to recommend policies that promote economy and efficiency in the administration of such programs and operations; and to prevent and detect fraud and abuse in them.

The objective of this performance audit was to assess whether FHFA has an effective supervisory control structure and sufficient examination coverage and oversight activities to adequately and timely identify and mitigate risks related to Freddie Mac’s controls over mortgage servicing contractors.
The audit noted opportunities for further improving FHFA’s supervision of the Enterprises’ controls over mortgage servicing contractors. Specifically, FHFA needs to continue to (a) identify opportunities to enhance its regulations or guidance to the Enterprises regarding counterparty contracting for mortgage servicing, including a contract provision authorizing FHFA’s access to servicer information; and (b) consider additional efforts to enhance FHFA’s supervision of Freddie Mac’s oversight of its mortgage servicing contractors.

FHFA-OIG believes that the recommendations in this report will help the Agency develop and adopt more economical, effective, and efficient operations. FHFA-OIG appreciates the assistance of all those who contributed to the audit.

This audit was led by Heath Wolfe, Audit Director, who was assisted by Menjie Medina, Audit Manager.

This report has been distributed to Congress, the Office of Management and Budget, and others and will be posted on FHFA-OIG’s website, http://www.fhfaoig.gov.

Russell A. Rau
Deputy Inspector General for Audits

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