GAO’s reports and testimonies give Congress, federal agencies, and the public timely, fact-based, non-partisan information that can improve government operations and save taxpayers billions of dollars.
The Housing and Economic Recovery Act of 2008 requires Fannie Mae and Freddie Mac, which issue mortgage-backed securities, to ensure diversity in their workforce and include diverse businesses in their business activities.
Fannie Mae and Freddie Mac issue mortgage-backed securities, which let lenders use investor cash for mortgage loans. When people default on the mortgages backing these securities—as many did in the 2007-2009 financial crisis—these issuers can take a hit.
What GAO Found Rules for capital adequacy require banks to hold a percentage of their assets as capital to act as a financial cushion to absorb unexpected losses. Under current rules, banks must hold capital equal to at least 8 percent of risk-weighted assets. Since the early 1990s, U.S.
What GAO Found The Federal Housing Finance Agency (FHFA) issued a new strategic plan for the conservatorships of Fannie Mae and Freddie Mac (the enterprises) in 2014 with reformulated goals and supporting actions that reflect a shift in priorities and changing market conditions.
What GAO Found The share of home mortgages serviced by nonbanks increased from approximately 6.8 percent in 2012 to approximately 24.2 percent in 2015 (as measured by unpaid principal balance). However, banks continued to service the remainder (about 75.8 percent).
What GAO Found Mortgage servicers purchase lender-placed insurance (LPI) for mortgages whose borrower-purchased insurance coverage lapses, most often because of nonpayment by the borrower or cancellation or nonrenewal by the original insurer.
What GAO Found Federal agency officials, market participants, and observers estimated that the qualified mortgage (QM) and qualified residential mortgage (QRM) regulations would have limited initial effects because most loans originated in recent years largely conformed with QM criteria.