FHFA Releases Performance and Accountability Report

The Federal HomernFinance Agency has released its 2010 Performance and Accountability Report (PAR) and said that it had met only 46 percent of its 2010 performance goals.  However, the agency said, in a number ofrncases in which a goal was not fully satisfied, the agency did achieve arnsubstantial degree of progress toward that goal.  In some cases, goals were achieved in somernquarters but missed in others.</p

The PAR, which isrnpart of the agency’s budget development process, reflects FHFA’s success inrnachieving its mission which had three strategic goals:  </p

Strategic Goal # 1: ThernHousing GSEs operate in a safe and sound manner and comply with legalrnrequirements.</p

Strategic Goal # 2: ThernGSEs support a stable, liquid, and efficient mortgage market, includingrnsustainable homeownership and affordable housing.</p

Strategic Goal # 3:  FHFA preserves and conserves the assets andrnproperty of the enterprises, ensures focus on their housing mission, andrnfacilitates their financial stability and emergency from conservatorship.  </p

There were 20rnperformance goals set out to support the strategic goals and an additional sixrnto support FHFA’s resource management strategy. rnPerformance goals are considered met when targets for all performancernmeasures have been achieved.  12 out ofrnthe 26 goals were met or achieved during the year</p

The first strategicrngoal had two performance goals; (1) Fannie Mae and Freddie Mac would complyrnwith legal requirements and operate in a safe and sound manner and withrnadequate capital and access to funds and capital and (2) the FHL Banks and thernOffice of Finance would do the same. rnNeither GSE met the target of improving in one or more of the componentrnratings that measured achievement of this goal. In fact, most of the ratingsrndid not even improve.  The onlyrnachievement FHFA counted in this area was that Freddie Mac’s market risk ratingrnimproved from “critical concerns” to “significant concerns”rnat the end of the second quarter.  </p

Performance goal twornwas measured by whether each FHLBank either holds a rating of 2 or better orrnoperates under a performance improvement plan acceptable to FHFA within 90rncalendar days of being downgraded that rating.   SevenrnFHLBanks were assigned a rating below “2” and three of those were notrnoperating under an acceptable improvement plan within 90 days.</p

Under Strategic GoalrnTwo FHFA sought to insure that each GSE maintained liquidity levels consistentrnwith FHFA regulatory requirements.  This performancerngoal was partially met in that neither GSE’s share of the single family mortgagesrnand originations did not decline by more than 10 percent when measured againstrnits share a year earlier.  Fannie Mae’srnshare declined from 40.04 percent in 2009 to 36.36 percent and Freddie’s sharernfrom 25.61 percent to 23.75 percent.  However,rnthe second performance measure for the GSEs to maintain liquidity levelsrnconsistent with FHFA regulatory requirements was missed by Fannie Mae.</p

The secondrnperformance goal mandated that the GSEs operate their programs in an effectivernand efficient manner, developing products, establishing partnerships, andrnfinancing homes for very low, low, and moderate-income households.  One of the three measures of this goal, that FHLBanks’rnAHP funds are awarded in compliance with laws and regulations, was met throughrnexaminations at all 12 FHLBanks with only one violation found and remedied.  The other two performance measures relating tornthe issuance of affordable housing goal regulations covering the GSEs andrnFHLBank and regulations requiring the GSEs to service the manufactured and ruralrnhousing segments of the market were achieved but did not meet their deadlines.</p

The third performancerngoal required FHFA to support an efficient secondary mortgage market.  FHFA meet both the requirement to expand thernquarterly House Price Index (HPI) by producing a median HPI and increasing thernnumber of geographic areas covered and to publish at least six working papers,rnmortgage market notes, or research papers. rnThis goal was met.</p

Under the fourthrnperformance goal FHFA was mandated to collaborate with other federal agenciesrnand stakeholders to share information concerning mortgage markets, the nation’srnhousing finance system, and regulatory issues. rnFHFA met quarterly with the President’s Working Group and Federal HousingrnFinance Oversight Board, and met regularly with industry stakeholders and thernCEOs of the GSEs, satisfying the first performance measure.  It answered 253 Congressional inquiries, butrnonly responded to 88 percent within the goal of 15 days. </p

FHFA meet three ofrnits measures under Strategic Goal 3, performing least successfully on the firstrnperformance goal to preserve and conserve each GSE’s assets and property.  It failed to properly meet either of the twornperformance measures; to fill vacancies on the Boards and senior managementrnteams within 180 calendar days and was six months late in achieving the secondrnmeasure, to receive and review from each GSE a complete inventory of assets,rnpartnerships, contracts, and litigation activities.  There was a 80 percent success in delegatingrnappropriate authorities to each GS’;s management; the agency met its goalrnduring each of the first two quarters but fell short the remainder of the year.</p

FHFA satisfied bothrnmeasures under the third performance goal, to ensure the GSEs have effectivernprograms that respond to problems in the mortgage markets by reducingrnpreventable foreclosure.  It was able tornincrease the number of loan modifications to 465,676, well above its 400,000rngoal.  The second measure, that less thanrn35 percent of modifications fall 60+ days delinquent, was met in three quartersrnand the was at 35 percent in the fourth.</p

FHFA worked with thernAdministration and Congress to develop an effective structure for the GSEs tornemerge from conservatorship, meeting its target through providing technicalrnassistance to the Administration and Congress.</p

FHFA met 50 percentrnof its performance goals for resource management strategy.  It failed to fill the majority of vacanciesrnin the department within 80 business days and missed the target of to increase qualified,rndisabled, minority, and female job applicants by 5 percent.  It did succeed in obtaining all of itsrnexternal audits and reviews with unqualified opinions and no material witnessesrnand had a net cost per value of the 14 housing GSEs of 0.0022 percent.  Its infrastructure systems were available forrnuse by staff a satisfactory 99 percent of the time but it did not finalize arnnew strategic plan for Examiner Workstations by the end of the fiscal year.

All Content Copyright © 2003 – 2009 Brown House Media, Inc. All Rights Reserved.nReproduction in any form without permission of MortgageNewsDaily.com is prohibited.