Regulator says companies still suffer from severe operational and financial weaknesses. Recruiting executives also tough.

(Source: CNN)

Fannie Mae and Freddie Mac, charged with helping lead the nation out of its housing crisis, are facing “critical” financial problems, federal regulators said Monday. 

The companies suffer from severe financial, operational and compliance weaknesses, the Federal Housing Finance Agency said a report to Congress detailing its annual examinations of the firms. Taken over by the government in September, Fannie and Freddie are not able to operate without federal assistance.

“With new senior management teams, each enterprise has made strides in remediating problems,” the agency said. “But they still face numerous significant challenges including building and retaining staff and correcting operational and credit management weaknesses that led to conservatorship.”

Read Tami Luhby’s full article “Fannie and Freddie in ‘critical’ condition” in CNN (May 18, 2009).

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