FHFA: Fannie Mae, Freddie Mac still face significant challenges

The Federal Housing Finance Agency says, despite progress, Fannie Mae and Freddie Mac still face significant challenges ahead.

The FHFA???s annual report to Congress concludes that Fannie Mae and Freddie Mac are both ???critical concerns??? that had substantial safety and soundness issues that led them to be taken over by the government in September.

???With new senior management teams, each enterprise has made strides in remediating problems, but they still face numerous significant challenges including building and retaining staff and correcting operational and credit management weaknesses that led to conservatorship,??? the report says.

Content Continues Below

It also says both increased their backing of the mortgage market by 5.6 percent last year, to a total of $5.2 trillion.

???The problems of the last two years in the financial markets are slowly abating, but the challenges in the housing markets continue,??? said FHFA director James Lockhart in a statement. ???It is my hope that all market participants, the government, and the GSEs will creatively work together to help the United States economy and housing market recover.???

Fannie Mae (NYSE: FNM) this month reported a $23.2 billion first quarter loss. Freddie Mac (NYSE: FRE) reported a quarterly loss of $9.9 billion.