The Federal Housing Finance Agency's watchdog asked the regulator to improve its record keeping for decisions made as the government-sponsored enterprises' conservator after finding shortcomings in a sample of 40 files.
"We found three decisions in our sample for which FHFA could not provide documentation supporting the required FHFA director approval or required analysis supporting the decision," its inspector general's office said in a report issued Wednesday.
The issue stems from
"FHFA officials told us they could not locate the relevant records and the FHFA officials who analyzed or approved these decisions were no longer with the agency or had since transitioned out of the office responsible for the analysis," Deputy IG James Hodge said in the report.
The report makes two main recommendations related to the agency's Division of Conservatorship Oversight and Readiness, which assists the director in this role. The FHFA agreed to address them with steps it plans to take by Feb. 29 of next year.
When it comes to making improvements to conservatorship documentation, the regulator's plans to address this include a training for the FHFA offices involved in the decision making process. The training "will reiterate the importance of documenting decisions, including all analysis, supporting documentation, and evidence of the director's approval," according to the IG's report.
The IG also recommended improving oversight policies and procedures in this area, with the FHFA agreeing to "establish guidance for performing and documenting DCOR's surveillance of each enterprise's board and management oversight activities" to this end.
The enterprises the FHFA oversees, Fannie Mae and Freddie Mac, back a significant number of mortgages in the U.S. and have been in government conservatorship since the Great Recession's housing crash threatened their finances.
The Trump administration actively worked toward removing Fannie and Freddie from conservatorship and the FHFA's current director, Sandra Thompson, has said it's something
