The Federal Housing Finance Agency came up short when it comes to supervising the GSEs to ensure a “safe and sound operation,” according to a Federal Housing Finance Agency Office of Inspector General report released late last week. The IG also suggested that the FHFA follow the lead of other federal financial regulators with stronger supervisory standards including the Federal Reserve System and the Office of the Comptroller of the Currency. “Among our findings was that FHFA had difficulty completing its planned targeted examinations over four supervisory cycles from 2012 through 2015 and that the number of targeted examinations planned and completed during each supervisory cycle has fallen since 2012 for Freddie Mac and has diminished significantly for Fannie Mae,” said the IG.
The Federal Housing Finance Agency agreed to disclose the total cost of the common securitization platform after a Dec. 15 audit by the FHFA Office of Inspector General revealed issues in transparency.The auditors said that while the FHFA committed to be transparent in its development of the multiyear project in 2014, the FHFA has not disclosed detailed costs or associated risks in its public reports. Instead, it only discloses the costs incurred though mid-2015. FHFA only disclosed specific CSP cost data once in a September 2015 status report, in which it announced that, from 2012 through mid-2015, the GSEs spent $146 million to develop the actual CSP platform. Then, their 2015 10-Ks revealed the amount increased to $218 million by year-end 2015.
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