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Nonbank Servicers Pose Fannie-Freddie Risk, Says Audit

The regulator of Fannie Mae and Freddie Mac should strengthen its oversight to protect the two companies from risks posed by nonbank mortgage servicers, according to an auditor’s report.

Nonbank servicers’ rapid growth and reliance on short-term financing has left some of them unable to adequately manage loans backed by the two government-sponsored enterprises, the report from the Federal Housing Finance Agency Office of the Inspector General said.