Restoring the functioning of mortgage markets

Default and foreclosure rates for home mortgages have soared to record levels and the resulting turmoil has severely impacted credit markets, further limiting financing options for current and prospective homeowners. While regulators have taken action to prevent ongoing problems from reoccurring, the number of foreclosures and defaults continues to rise, raising questions about efforts to assist distressed homeowners with their mortgages. Moreover, the government takeover of Fannie Mae and Freddie Mac—the government-sponsored enterprises established to create a secondary market for mortgages—raises questions about how they can be restructured when these entities emerge from conservatorship.

^ Back to topWhat Needs to Be Done

Building upon past work on subprime mortgages, predatory lending, and alternative mortgage products, GAO has a number of active and planned engagements underway involving mortgage markets that will be issued throughout 2009. Issues being addressed include the current condition of mortgage markets, reverse mortgages, fair lending, and government-sponsored enterprise reform. This work should help inform decision-makers as they begin to evaluate and reform mortgage markets and address issues including

• Coordinating various programs aimed at mitigating foreclosures to help stabilize financial markets
• Implementing mortgage lending standards that promote sustainable homeownership
• Ensuring fair lending laws are being enforced
• Evaluating long-term options for ensuring a viable secondary market and the future of Fannie Mae and Freddie Mac

^ Back to topKey Reports

Information on Recent Default and Foreclosure Trends for Home Mortgages and Associated Economic and Market Developments

GAO-08-78R, October 16, 2007

Summary (HTML)   Full Report (PDF, 61 pages)   Accessible Text

Alternative Mortgage Products: Impact on Defaults Remains Unclear, but Disclosure of Risks to Borrowers Could Be Improved

GAO-06-1021, September 19, 2006

Summary (HTML)   Highlights Page (PDF)   Full Report (PDF, 64 pages)   Accessible Text   Recommendations (HTML)

Housing Finance: Ginnie Mae Is Meeting Its Mission but Faces Challenges in a Changing Marketplace

GAO-06-9, October 31, 2005

Summary (HTML)   Highlights Page (PDF)   Full Report (PDF, 46 pages)  

Consumer Protection: Federal and State Agencies Face Challenges in Combating Predatory Lending

GAO-04-280, January 30, 2004

Summary (HTML)   Highlights Page (PDF)   Full Report (PDF, 127 pages)   Accessible Text   Recommendations (HTML)

Housing Enterprises: Potential Impacts of Severing Government Sponsorship

GGD-96-120, May 13, 1996

Summary (HTML)   Full Report (PDF, 110 pages)  

Government-Sponsored Enterprises: A Framework for Limiting the Government's Exposure to Risks

GGD-91-90, May 22, 1991

Summary (HTML)   Full Report (PDF, 138 pages)