Greater Staffing Flexibility Needed to Improve Management
T-RCED-94-67: Published: Oct 29, 1993. Publicly Released: Oct 29, 1993.
- Full Report:
GAO discussed the Government National Mortgage Association's (GNMA) staffing levels, focusing on GNMA: (1) management problems; (2) oversight of issuers; and (3) response to those management problems. GAO noted that: (1) GNMA has evolved from subsidizing interest rates for low- and moderate-income borrowers to attracting capital for government-insured and guaranteed homeowners loans; (2) GNMA guarantees payment of principle and interest to investors through mortgaged-backed government securities; (3) oversight weaknesses have prevented GNMA from quickly responding to market conditions that weaken some of its issuers and, as a result, GNMA has become the manager of mortgages acquired through issuers' defaults; (4) flaws in Federal Housing Administration and Department of Veterans Affairs' mortgage programs have contributed to issuers' defaults; (5) GNMA has taken steps to improve its oversight and minimize potential losses by developing a comprehensive management information system and performing regular issuer reviews; (6) staffing limitations have prevented GNMA from effectively monitoring its contractors and responding to changing market conditions; and (7) GNMA has requested additional staff to improve its oversight and manage the disposition of defaulted portfolios.