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The Federal National Mortgage Association in a Changing Economic Environment

RCED-85-102 Published: Apr 15, 1985. Publicly Released: Apr 15, 1985.
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Highlights

Pursuant to a congressional request, GAO reported on: (1) how the secondary market for residential mortgages is changing and the Federal National Mortgage Association's (FNMA) role in that market; (2) the privileges and constraints that affect FNMA in its public-purpose role and its profitability as a shareholder-owned corporation; (3) the interest rate and credit risks that FNMA incurs; and (4) how the Departments of Housing and Urban Development (HUD) and the Treasury, as federal regulators, oversee FNMA activities.

Recommendations

Matter for Congressional Consideration

Matter Status Comments
To improve the regulatory, oversight, and evaluation functions relative to FNMA, Congress should establish by legislation a permanent oversight function within HUD or some other federal regulatory entity that will monitor FNMA activities, evaluate how well it performs its public policy objectives, and periodically report to Congress on these matters.
Closed – Implemented
Congress took no action on this recommendation.
To improve the regulatory, oversight, and evaluation functions relative to FNMA, Congress should clarify in legislation the regulatory role it desires, particularly as regards aspects of FNMA operations such as its portfolio operations which expose the federal government to financial risk.
Closed – Implemented
Congress took no action on this recommendation.
Congress should provide GAO with the authority to audit FNMA financial records and evaluate its programs with the right to access all FNMA corporate records.
Closed – Not Implemented
Congress took no action on this recommendation.

Full Report

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Topics

Housing programsInterest ratesLending institutionsMortgage loansMortgage programsMortgage-backed securitiesUS government securitiesMortgagesMortgage marketMortgage credit