Agency oversight led to deteriorating foreclosures

According to a report by the inspector general of the Federal Housing Finance Agency (FHFA), loose oversight of thousands of contractors tasked with maintaining foreclosed properties caused neighborhoods to deteriorate and exposed Fannie Mae and Freddie Mac to fraudulent billing.

From 2008 through most of last year, the FHFA did not conduct the necessary targeted reviews of the two firms’ foreclosure management programs or the nearly 10,000 contractors hired to maintain distressed homes.

As of the end of December, Fannie Mae and Freddie Mac owned a combined 179,000 homes – three times their inventory from just four years earlier.