Washington, DC – OFHEO Director James B. Lockhart today released the agency’s 2007 Performance and Accountability Report (PAR). The report details OFHEO’s operations and accomplishments as the safety and soundness regulator for Fannie Mae and Freddie Mac in the fiscal year ended September 30, 2007.
“I am pleased to submit this report detailing our operations, financial performance and the challenges ahead,” said Lockhart. “This report comes at a time of great uncertainty in the U.S. housing markets, further underscoring the importance of the agency’s mission, our accomplishments this past year and the need for legislative reform going forward.”
For the tenth straight year, OFHEO received a clean audit opinion from the agency’s external auditors and achieved numerous other accomplishments, detailed in the report:
OFHEO continued to strengthen its operations and standards across all aspects of its supervision program. It published a major update to its Supervision Handbook, which outlines the agency’s supervisory program to examine the Enterprises, and published three new examination guidances.
The agency worked with other federal regulators and took proactive steps to help ease the impact of volatility in the mortgage markets, including implementing the subprime and nontraditional mortgage guidances.
Oversight of remediation efforts at the companies proceeded but at the end of the reporting period neither Fannie Mae nor Freddie Mac had completed all of the items in their consent orders.
In addition to OFHEO’s continuous supervision and examination, in FY 2007, OFHEO conducted 40 targeted examinations of the Enterprises including reviews of internal audit planning and guarantee fee pricing models.
94 percent of the Matters Requiring Attention (MRAs) in the examination process that were due were completed by the Enterprises and validated by OFHEO.
OFHEO resolved the enforcement actions against former executives at Freddie Mac and filed a Notice of Charges against three former executives at Fannie Mae.
The agency made significant progress on the President’s Management Agenda (PMA) during FY 2007, including committing to five government-wide PMA initiatives.
The agency’s 2006 OMB Program Assessment Rating Tool (PART) assessment, published in February 2007, found that OFHEO has improved its effectiveness, and that the agency’s key obstacle is the lack of legislation to strengthen its regulatory powers.
OFHEO updated its Continuity of Operations (COOP) Plan, which identifies essential functions and alternate plans in an emergency.
OFHEO published a Human Capital Strategic Plan and enhanced recruitment efforts in order to fill numerous vacancies and ensure a strong agency workforce.
OFHEO launched a revamped and updated website with improved features and easier navigation.
OFHEO published a Technology and Information Management Five-Year Strategic Plan.
The report provides a three-part summary of OFHEO’s operations, progress toward achieving the agency’s goals and a financial summary for FY 2007.
“As this report shows, this agency has accomplished much but the challenges facing OFHEO, Fannie Mae, Freddie Mac and all stakeholders in the nation’s housing markets will continue in the year ahead,” said Lockhart. “Enhanced supervision and the legislation needed to strengthen GSE oversight are crucial to prevent a recurrence of past problems and potentially more serious ones in the future.”
The PAR report in PDF format.
Corinne Russell (202) 414-6921 / Stefanie Mullin (202) 414-6376