In as early as 2003 mortgage finance giant Fannie Mae knew of extensive abuses in the foreclosure process used by firms it hired to remove troubled borrowers. But it wasn’t until mid-2010 when extensive news reports surfaced about the widespread fraud perpetrated during foreclosure proceedings that the company took steps to address the fraud.
The news comes from an inspector general’s report that shows widespread refusal to acknowledge trouble in foreclosure operations despite repeated borrower complaints about improper actions taken by law firms in foreclosure proceedings.
That is likely because foreclosures have become big business for lawyers and lenders alike. One firm at the heart of the foreclosure fraud, the David J. Stern firm in Plantation, Florida, was handling more than 75,000 foreclosure actions a year before Fannie Mae terminated its relationship with it due to significant problems with its legal work.
The problems detailed in the inspector general’s report place Fannie Mae squarely with other lenders in their exploitation of Americans for short-term financial gain. If anything, the report illustrates the significant lack of good faith our financial services institutions operate on, even those designed to intended to equalize the playing field for working class Americans.
The system was gamed, and it was gamed criminally. Lenders and foreclosure firms engaged in widespread fraud and deceit and so far remain unaccountable. Some bold state attorneys general are trying to change that, as are protesters occupying Wall Street. But until that accountability comes at the highest level Americans will never see justice.
Photo from respres via flickr.