Government National Mortgage Association:

Greater Staffing Flexibility Needed to Improve Management

RCED-93-100: Published: Jun 30, 1993. Publicly Released: Jul 13, 1993.

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Pursuant to a congressional request, GAO provided information on the Government National Mortgage Association's (GNMA) activities, focusing on: (1) its mission objectives; and (2) recent management and issuer oversight problems and solutions.

GAO found that: (1) although the GNMA mission of financing low- and moderate-income housing has essentially remained the same, GNMA activities have significantly changed; (2) declining real estate markets, flawed federal mortgage programs, changes in home loan mortgage guaranty practices, and GNMA issuers' nonpayment have left GNMA vulnerable to financial loss and created management problems; (3) since 1988, GNMA has undertaken several initiatives to improve its oversight of the mortgage-backed security program and dispose of assets acquired from defaulted issuers; (4) GNMA relies on contractors to monitor issuer and default payments, operate management information systems, and manage and dispose of acquired assets because it does not have adequate authority to increase its staffing levels; and (5) increased reliance on contractors and Department of Housing and Urban Development (HUD) staffing constraints have raised concerns over GNMA ability to monitor contractors and to respond to future management challenges.

Matter for Congressional Consideration

  1. Status: Closed - Not Implemented

    Comments: This issue has not been raised by Congress, and GAO knows of no future plans.

    Matter: Congress should monitor HUD and Office of Management and Budget (OMB) efforts to resolve GNMA staffing problems. If HUD and OMB do not resolve this problem, Congress may wish to consider directing them to provide GNMA with the necessary staff without regard to the HUD personnel budget.

Recommendations for Executive Action

  1. Status: Closed - Not Implemented

    Comments: No action has been taken, or intended, that would be in line with the recommendation other than the initiation by GNMA of Real Estate Mortgage Investment Conduits for which GNMA staff were assigned.

    Recommendation: To ensure that GNMA has the flexibility to manage its growing workload, respond to changing markets, and create new products, the Secretary of Housing and Urban Development and the Director, OMB, should work together to consider GNMA staffing needs and provide for those needs without regard to personnel limitations imposed on HUD.

    Agency Affected: Department of Housing and Urban Development

  2. Status: Closed - Not Implemented

    Comments: No action has been taken, or intended, that would be in line with the recommendation other than the initiation by GNMA of Real Estate Mortgage Investment Conduits for which GNMA staff were assigned.

    Recommendation: To ensure that GNMA has the flexibility to manage its growing workload, respond to changing markets, and create new products, the Secretary of Housing and Urban Development and the Director, OMB, should work together to consider GNMA staffing needs and provide for those needs without regard to personnel limitations imposed on HUD.

    Agency Affected: Executive Office of the President: Office of Management and Budget

  3. Status: Closed - Not Implemented

    Comments: No action has been taken, or intended, that would be in line with the recommendation other than the initiation by GNMA of Real Estate Mortgage Investment Conduits for which GNMA staff were assigned.

    Recommendation: The Secretary of Housing and Urban Development should report to Congress within 60 days of the issuance of this report on the options that it and OMB have considered and the actions they have taken to provide GNMA with the resources it needs to operate in a business-like manner while reducing the overall financial risk to the federal government.

    Agency Affected: Department of Housing and Urban Development

 

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