Improve model documentation by addressing the model documentation deficiencies cited in this report and narrowing or consolidating them into fewer pieces of documentation, as appropriate.

Develop and implement controls that ensure the updating of model documentation when model changes are made.

Develop and implement policies and procedures to ensure compliance with model risk management guidance regarding adequate and well-documented model assumptions.

Document all model assumptions that are undocumented, providing the basis for any assumptions or decisions made when developing each model assumption.

Document the economic rationale behind unintuitive model coefficients to support that the unintuitive relationships are appropriate.

Develop and implement policies and procedures or enhance or clarify, as appropriate, existing policies and procedures that will require additional analyses whenever thresholds are breached or other analyses indicate potential modeling issues.

Develop and implement policies and procedures to require a sufficiently granular decomposition analysis that can adequately explain the impact of all the model changes made.

Test whether a cumulative housing price appreciation (HPA) variable should be added to the probability of prepayment, probability of default, foreclosure timeline, buyout time models, and cure rate assumptions. Ginnie Mae should provide an analysis if it believes that adding an HPA variable would not be appropriate to support its position.

The OIG has determined that the contents of this recommendation would not be appropriate for public disclosure and has therefore limited its distribution to selected officials.

The OIG has determined that the contents of this recommendation would not be appropriate for public disclosure and has therefore limited its distribution to selected officials.