OFHEO Finalizes Regulation on Mortgage Fraud
WASHINGTON - The Office of Federal Housing Enterprise Oversight recently finalized for publication in the Federal Register a regulation requiring Fannie Mae and Freddie Mac to report mortgage fraud or possible mortgage fraud in a "timely fashion." The regulation, effective 30 days from publication, also requires the housing Government Sponsored Enterprises to maintain adequate internal controls, procedures and training programs to assure an effective system to detect and report actual or possible mortgage fraud. An OFHEO examination force will review information that's received, which it says will help in assessing internal controls, security efforts, management of risks and other factors at the GSEs. OFHEO is also developing a process for sharing relevant mortgage fraud information with other federal agencies. OFHEO Acting Deputy Director Alfred Pollard said the regulation "makes transparent OFHEO's oversight of Enterprise initiatives to detect mortgage fraud at the earliest possible time. This oversight coupled with Enterprise efforts will send a clear message that fraud will be actively resisted by the companies and their regulator. We believe the Enterprises are committed to this effort." In addition to the final regulation, the OFHEO has finalized a Policy Guidance detailing procedures for implementing the new regulation.