The Federal Housing Administration needs to improve risk assessment and human capital management, GAO has concluded after analyzing data on single-family loans it backs, reviewing risk assessment practices and interviewing officials.
The FHA insures private lenders against losses from defaults on single-family mortgages, and its role has increased in proportion to contractions in other areas of the mortgage market.
While FHA has taken steps to identify risks in its single-family programs – including the establishment of a risk office in 2010 and the launch of a quality control initiative for single-family loans — it has not combined these risk assessment efforts and lacks annual assessments and tools to anticipate risks from changing conditions, according to GAO-12-15.
The Department of Housing and Urban Development agreed to develop an integrated risk assessment strategy, conduct annual risk assessments, establish ongoing mechanisms to anticipate emerging risks, and develop workforce and succession plans.
