FHFA Plans Enhanced Oversight of Mortgage Servicing Transfers

Fannie Mae Mortgage Servicing FHFA

On August 22, the FHFA Office of Inspector General (OIG) issued a report on its review of the FHFA’s oversight of Fannie Mae’s January 2013 representation and warranty settlement with a mortgage originator and the FHFA’s related approval of the sale of certain of the originator’s mortgage servicing rights (MSR) to specialty servicers. The OIG reviewed the process by which the FHFA assessed and approved the MSR transfer and concluded that the FHFA’s review of the MSR transfer did not reflect the “depth of analysis that likely would have been accorded had FHFA followed a process comparable to that used in its newly established process for reviewing mortgage repurchase . . . settlements.” As such, the OIG determined that the FHFA should establish a formal review process for “compensatory fee settlements and significant mortgage servicing rights transfers.” In a letter attached to the report, the FHFA concurred with the OIG’s recommendation, and committed to establish guidelines for compensatory fee settlements and significant MSR transfers by January 31, 2014.