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Volume 14 - Number 17

August 22, 2014

IG Dings FHFA for Lax Oversight of Fannie Short Sales Closed at Loss

Delegated servicers hired by Fannie Mae failed on numerous occasions to close short sales at the authorized price, according to a new audit from the Inspector General of the Federal Housing Finance Agency. The IG also found that a Fannie Mae remediation plan does not hold servicers fully accountable for the resulting losses. Issued late last week, the IG audit focused on the effectiveness of the FHFA’s oversight and Fannie’s controls over delegated servicers to ensure that net proceeds for short sales met the authorized reserve established by Fannie. The IG found that both the GSE and its regulator came up short.

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With rates higher this year, there has been talk of lenders liberalizing their underwriting standards in an effort to increase volume and make up for lower refis.

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