The Federal Housing Finance Agency's oversight of a nearly three-year-old initiative designed to improve the performance of residential servicers working for Fannie Mae and Freddie Mac has "significant limitations" and is in dire need of supervision, according to a new report from the agency’s Inspector General. The FHFA’s Servicing Alignment Initiative, introduced in April 2011, requires Fannie and Freddie to align their servicing requirements in four key areas: borrower contact, delinquency management practices, loan modifications and foreclosure timelines.