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54 DS News Government Progress Report k ey per sonnel Melvin L. Watt Director Michael P. Stephens Acting Inspector General Michael J. Powers Ombudsman Richard (Rick) B. Hornsby COO Nina Nichols Acting Deputy Director of the Division of Enterprise Regulation Fred C. Graham Deputy Director of the Division of Federal Home Loan Bank Regulation Nina Nichols Deputy Director of the Division of Supervision Policy and Support Sandra Thompson Deputy Director of the Division of Housing Mission and Goals Wanda DeLeo Deputy Director of the Division of Conservatorship Nancy Burnett Acting Associate Director of the Office of Minority and Women Inclusion (OMWI) Alfred M. Pollard General Counsel DS News Housing Score I BUSINESS SCOPE FHFA is charged with ensuring that the entities it regulates operate in a safe and sound manner, including maintaining adequate capital and internal controls in addition to creat- ing resilient housing finance markets in compliance with the Safety and Soundness Act and the public interest. REGULATION AND OVERSIGHT FHFA is an independent federal agency. It was created by merging the Federal Housing Finance Board (FHFB), the Office of Federal Housing Enterprise Oversight (OFHEO), and the mission team sponsored by HUD. MISSION » The agency was established as part of the Housing and Economic Recovery Act of 2008 (HERA) to ensure safety, security, and liquidity in the housing market as it relates to GSE-backed loans. » FHFA's mission is to promote the safety and soundness of GSEs and ensure they serve as a reliable source of liquidity and funding for housing finance and community investment. » The housing GSEs include Fannie Mae, Freddie Mac (known as the Enterprises), the Federal Home Loan Banks, and the FHL Banks' joint Office of Finance (known as the Federal Home Loan Bank System). » One of FHFA's major duties is to handle serious complaints by mortgage holders (known as "escalated cases"). » FHFA is separate from the Federal Housing Authority, which largely provides mortgage insurance. The FHFA regulates Fannie Mae, Freddie Mac, and 12 federal home loan banks. SUCCESSES » According to a 2013 report by the FHFA's Office of the Inspector General (OIG), the agency has not done well regarding escalated cases. The report indicates Freddie Mac received more than 34,000 consumer complaints over a 14-month period ending in November of 2012 about questionable business tactics used by lenders. The OIG found that most of Freddie Mac's servicers were not complying with escalated case reporting requirements, and that FHFA oversight did not identify noncompliance with consumer complaint requirements. » The OIG concluded that FHFA's goals designed to keep homeowners in their homes and to foster better com- munication and actions between servicers and delinquent borrowers failed to address consumer complaints. » On a positive note, from October 2013 to March 2014, the FHFA OIG office obtained the indictment of 82 individuals and the conviction of 62 others, as well as the award of more than $46 million in criminal fines and res- titution orders. Many investigations produced significant results. OIG along with other federal and state agencies reached a $13 billion settlement with JPMorgan. OPPORTUNITIES/ISSUES » Because Edward J. DeMarco, the previous FHFA director, refused to allow principal reduction on underwater mort- gages to help prevent foreclosures, he received criticism and calls for his removal from office. » A Nobel economist called for DeMarco's firing, and a petition was circulated to remove him. » In 2013, New York Attorney General Eric T. Schneider- man led a nine-state coalition demanding new, perma- nent leadership at the FHFA. » Despite new FHFA leadership under Melvin L. Watt, in June 2014, Massachusetts Attorney General Martha Coakley filed suit against FHFA, Fannie, and Freddie for violating the state's foreclosure prevention law, citing a refusal to engage in foreclosure buyback programs, causing Massachusetts families to lose their homes. » In addition, the accuracy of FHFA property inspections has been questioned. The FHFA Inspector General has said that the organization's pre-foreclosure property inspection process needs improvement to ensure that pre-foreclosure inspection objectives are achieved in the most effective manner. » Specifically, OIG identified inspection reports with inconsistent and inaccurate information, missing or blurry photographs, manipulated date and time stamps, and unnecessary inspections that did not provide useful information. » Based on this assessment, critics recommend that FHFA direct the Enterprises (Fannie and Freddie) to establish uniform pre-foreclosure inspection quality standards and quality control processes for inspectors. PRESIDENT OBAMA'S MAKING HOME AFFORDABLE PROGRAM By overseeing and regulating the operations of the hous- ing GSEs, FHFA seeks to ensure that affordable financing, re-financing, and loan workouts for home loans will be made available to families and individuals. $324 million in total budgetary resources, which included $225 million in assessments $45.5 million in unobligated balance from FY 2012 $11.5 million in recoveries of prior year unpaid obligations $41.6 million in spending authority from offsetting collections. Obligations incurred increased by $25.6 million to $284.7 million in FY 2013. Federal Housing Finance Agency (FHFA) | CORPORATE HEADQUARTERS: Washington, D.C. $324 MILLION $45.5 MILLION $11.5 MILLION $41.6 MILLION $25.6 MILLION In FY 2013, FHFA had FHFA's costs and expenses are funded by annual assessments paid by the entities it regulates. Incomplete

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