GAO Critical of Fannie/Freddie Oversight

The Department of Housing and Urban Development used a "conservative" approach in setting the affordable housing goals for Fannie Mae and Freddie Mac, according to a General Accounting Office report released Tuesday.Research conducted by HUD and the Office of Federal Housing Enterprise Oversight "found that additional mortgage purchases required under the goals were modest and would not materially affect the enterprises' financial condition," GAO says in the report. The GAO report also noted that the two government-sponsored enterprises still require lenders to retain most of the credit risks on affordable multifamily loans. And HUD has not conducted research to see if these risk management strategies "impede lenders' willingness" to make multifamily loans. A House Banking subcommittee is scheduled to hold a hearing on the GAO report this Thursday.