Oversight Hearing Places Spotlight on New FHFA Programs

On Wednesday, the House Financial Services Subcommittee on Housing and Insurance held an oversight hearing with testimony from the Inspectors General of HUD and FHFA. In her opening statement, HUD Inspector General Davis underscored a priority on oversight work related to reducing environmental and public health hazards in HUD-assisted housing. She also highlighted challenges related to HUD management and performance, stating a common theme from their findings that “HUD does not have the capacity necessary to address the challenges it faces.” FHFA Inspector General Tomey’s opener contained a focus on improving Agency documentation when making conservatorship decisions and developing policies for reviews of nonbanks seller/servicers and reporting of appraisal bias.

In questioning, FHFA Inspector General Tomney faced heavy partisan pressure to investigate the Agency’s approval of Freddie Mac’s second-lien pilot and Fannie Mae’s title insurance pilot and its overall compliance with the Prior Approval of Enterprise Products rule making. In response, Inspector General Tomeny stated many times that the office is currently planning future work and committed to considering the issues raised in the hearing. This hearing and its conversations signal a sustained partisan focus on FHFA oversight, including “mission creep” by the Enterprises, amplified by concerns of White House influences in FHFA decisions during an election year.