The Federal Home Finance Agency has released its 2010 Performance and Accountability Report (PAR) showing it had met only 46 percent of its 2010 performance goals. However, in a number of cases in which a goal was not fully satisfied, the agency did achieve a substantial degree of progress toward that goal. In some cases, goals were achieved in some quarters but missed in others.

The PAR, which is part of the agency's budget development process, reflects FHFA's success in achieving its mission which had three strategic goals:

Strategic Goal # 1: The Housing GSEs operate in a safe and sound manner and comply with legal requirements.

Strategic Goal # 2: The GSEs support a stable, liquid, and efficient mortgage market, including sustainable homeownership and affordable housing.

Strategic Goal # 3: FHFA preserves and conserves the assets and property of the enterprises, ensures focus on their housing mission, and facilitates their financial stability and emergency from conservatorship.

There were 20 performance goals (more specific, shorter term) set out to support the strategic goals (broader, bigger picture) and an additional six to support FHFA's resource management strategy. Performance goals are considered met when targets for all performance measures have been achieved. 12 out of the 26 goals were met or achieved during the year.

The first strategic goal had two performance goals; (1) Fannie Mae and Freddie Mac would comply with legal requirements and operate in a safe and sound manner and with adequate capital and access to funds and capital and (2) the FHL Banks and the Office of Finance would do the same. Neither GSE met the target of improving in one or more of the component ratings that measured achievement of this goal. In fact, most of the ratings did not improve. The only achievement FHFA counted in this area was that Freddie Mac's market risk rating improved from "critical concerns" to "significant concerns" at the end of the second quarter.

Performance goal two was measured by whether each FHLBank either holds a rating of 2 or better or operates under a performance improvement plan acceptable to FHFA within 90 calendar days of being downgraded to that rating. Seven FHLBanks were assigned a rating below "2" and three of those were not operating under an acceptable improvement plan within 90 days.

Under Strategic Goal Two FHFA sought to insure that each GSE maintained liquidity levels consistent with FHFA regulatory requirements. This performance goal was partially met in that neither of the GSE's shares of single family mortgages and originations declined by more than 10 percent when measured against its share a year earlier. Fannie Mae's share declined from 40.04 percent in 2009 to 36.36 percent and Freddie's share from 25.61 percent to 23.75 percent. However, Fannie Mae fell short of a performance goal to maintain liquidity levels consistent with FHFA regulatory requirements.

The second performance goal mandated that the GSEs operate their programs in an effective and efficient manner, developing products, establishing partnerships, and financing homes for very low, low, and moderate-income households. One of the three measures of this goal-that FHLBanks' AHP funds are awarded in compliance with laws and regulations, was met through examinations at all 12 FHLBanks with only one violation found and remedied. The other two performance measures relate to the issuance of affordable housing regulations covering the GSEs and FHLBank as well as regulations requiring the GSEs to service the manufactured and rural housing segments of the market. Both measurement targets were reached, yet fell short of their deadlines.

The third performance goal required FHFA to support an efficient secondary mortgage market. FHFA met the requirements by expanding the quarterly House Price Index (HPI) by producing a median HPI and to increase the number of geographic areas covered and to publish at least six working papers, mortgage market notes, or research papers. This goal was met.

Under the fourth performance goal FHFA was mandated to collaborate with other federal agencies and stakeholders to share information concerning mortgage markets, the nation's housing finance system, and regulatory issues. FHFA met quarterly with the President's Working Group and Federal Housing Finance Oversight Board, and met regularly with industry stakeholders and the CEOs of the GSEs, satisfying the first performance measure. It answered 253 Congressional inquiries, but only responded to 88 percent within the goal of 15 days.

FHFA meet three of its measures under Strategic Goal 3, performing least successfully on the first performance goal to preserve and conserve each GSE's assets and property. It failed to properly meet either of the two performance measures; to fill vacancies on the Boards and senior management teams within 180 calendar days and was six months late in achieving the second measure, to receive and review from each GSE a complete inventory of assets, partnerships, contracts, and litigation activities. There was a 80 percent success in delegating appropriate authorities to each GS';s management; the agency met its goal during each of the first two quarters but fell short the remainder of the year.

FHFA satisfied both measures under the third performance goal, to ensure the GSEs have effective programs that respond to problems in the mortgage markets by reducing preventable foreclosure. It was able to increase the number of loan modifications to 465,676, well above its 400,000 goal. The second measure, that less than 35 percent of modifications fall 60+ days delinquent, was met in three quarters and the was at 35 percent in the fourth.

FHFA worked with the Administration and Congress to develop an effective structure for the GSEs to emerge from conservatorship, meeting its target through providing technical assistance to the Administration and Congress.

FHFA met 50 percent of its performance goals for resource management strategy. It failed to fill the majority of vacancies in the department within 80 business days and missed the target of to increase qualified, disabled, minority, and female job applicants by 5 percent. It did succeed in obtaining all of its external audits and reviews with unqualified opinions and no material witnesses and had a net cost per value of the 14 housing GSEs of 0.0022 percent. Its infrastructure systems were available for use by staff a satisfactory 99 percent of the time but it did not finalize a new strategic plan for Examiner Workstations by the end of the fiscal year.