After witnessing the implosion of Fannie Mae and Freddie Mac, the Federal Housing Finance Agency (FHFA) didn’t bother to take action on numerous complaints against the taxpayer-owned mortgage finance giants over a two-year period.

 

According to its inspector general, the housing agency failed to refer nearly 100 complaints to criminal investigators alleging that Fannie or Freddie had committed foreclosure abuse or mortgage fraud from July 30, 2008—when FHFA was created—to October 31, 2010.

 

The IG did not delve into the issue of whether the complaints had merit. But it did say the agency’s inaction called attention to a specific problem—inadequate staffing.

 

Only two of FHFA’s personnel were responsible for handling complaints and neither received specific training “regarding how to evaluate complaints or how to identify allegations requiring further action by the agency or referral to law enforcement authorities, such as the Department of Justice or the FBI,” wrote the IG in its report.

 

Fannie and Freddie have cost the government about $154 billion since they nearly collapsed during the 2008 financial crisis.

-Noel Brinkerhoff

 

Oversight Group Did Not Refer Housing Complaints (by Gretchen Morgenson, New York Times)

Audit of the Federal Housing Finance Agency’s Consumer Complaints Process (Federal Housing Finance Agency, Office of Inspector General) (pdf)