US housing agency watchdog warns budget cut will stymie its work
FNMA•The Federal Housing Finance Agency cut funding for its inspector general’s office, which says its annual budget will fall to $20 million, 64% below the White House request. The acting deputy said the office would have to cut 70%-80% of staff and discontinue investigations.
1. Watchdog warns of cuts
The FHFA’s Office of Inspector General warned lawmakers that the agency’s funding reduction would force it to cut most of its staff and impair its ability to police misconduct. Acting Principal Deputy James Hodge said the office’s annual budget would fall to $20 million, 64% less than the White House submitted to Congress, requiring cuts of 70%-80% of staff and the discontinuation of investigations.
2. Agency defends reduction
The FHFA said the OIG accounted for 18% of the agency’s workforce, or about 110 people, and had requested about 16% of its budget, compared with about 2% at other regulators. Critics said those comparisons do not reflect the office’s oversight responsibilities for Fannie Mae, Freddie Mac and the federal home loan banks, or its investigations of mortgage-market fraud. OIG leaders told employees layoffs would occur over the coming months, while the office works with Congress on a possible legislative fix.
