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Freddie Mac, the Federal Housing Finance Agency, and Freddie Mac servicers have fallen short to report escalated customer complaints, according to a report from the Inspector General for the Federal Housing Finance Agency. Also, ranking member of the House Committee on Oversight and Government Reform, Congressman Elijah Cummings, D-MD, has reported that mortgage companies serviced by Freddie Mac have mostly failed to execute requirements, including reporting escalated cases, improper foreclosures, and fraudulent practices.

Congressman Elijah Cummings reported that Bank of America, Provident, CitiMortgage, and Wells Fargo failed to report “any escalated cases to Freddie Mac,” while the FHFA servicing initiative requires all servicers to report serious complaints and resolve them within 30 days.

Here are some additional details about the report and findings:

  • 98% of Freddie Mac’s servicers have not reported any escalated cases, as of December 2012.
  • Four out of eight of Freddie Mac’s largest servicers did not report any escalated cases, despite handling 20,000 cases in 14 months.
  • 21% of the escalated cases that were reported were not resolved within 30 days. Of the eight largest servicers, 25,528 were reported.
  • Freddie Mac ended 2012 with 10.6 million residential mortgages and $1.6 trillion unpaid principal balance.
  • The FHFA-OIG reports this oversight as “inadequate.”

The inspector general is recommending that Freddie Mac be required to report serious cases in a timely manner and to better define what an “escalated” case is. The inspector general also wants enhanced oversight from FHFA of Freddie Mac’s servicer performance and noncompliance fines.

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