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Fannie Mae Knew Of Foreclosure Fraud in 2003

Fannie Mae Knew Of Foreclosure Fraud in 2003

 

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.

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32 comments

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11:11PM PST on Jan 21, 2012

Thank you.

9:53PM PDT on Oct 30, 2011

Thanks

10:51AM PDT on Oct 7, 2011

Chris Dodd and Barney Frank invented this whole mess over the objections of the Republicans so the blame rests squarely on them!

7:58PM PDT on Oct 6, 2011

So your condescending claim of over-regulations works both ways. Again, not LESS regulation, just SMARTER, and strictly enforced, regulations. NCNB -- No Compliance, No Business. You violate in egregious fashion, we put you out of business until you behave like a responsible citizen.

7:58PM PDT on Oct 6, 2011

As for biggest culprits getting away with stuff, how about regulations and proper oversight that prevent, or at least strongly dissuade, ANYONE from engaging in questionable activities in the first friggin place? If Ken Lay and the other knuckleheads at Enron had been enjoined from their black magic bullshit voodoo by proper codes of ethics, bylaws and oversight, it would not have been one of the biggest corporate implosions in history. (No coincidence that Lay and Enron were good friends of W, is it?) Ditto Bear Stearns and Lehman. And how about that Halliburton crowd, huh? Not stiffing the stockholder or the investor, Lord no -- just the entire U.S. taxpaying public! As for regulations about oil drilling in the gulf -- is that meant to be some form of excuse? The industry has been victimized by improper or intrusive regulation? I guess those beach front businesses, and the fishermen, and the animals in the gulf, and the whole ecosystem, have less goddamn rights than the oil drillers, is that what you're implying? What a surprise that the volume of gushing oil was multiple times what B.P. steadfastly maintained, and that they couldn't clean it up -- because government regulations were not as rigidly enforced as they might have been, the proper equipment wasn't fully functional as proper testing had not been required, no doubt having something to do with the oil industry having been in bed for years with Minerals agency supposed to be regulating them! So your condescending cl

7:40PM PDT on Oct 6, 2011

Better that there be imperfect or burdensome regulations that ameliorate adverse effects than no regulations that in effect condone whatever businesses decide is best for their profits, including all-too-readily measured negative impacts on public health. I don't hear anyone complaining anymore about car seat belts, catalytic converters, lead-free gasoline or paint, sewage discharges directly into waterways, trigger locks on guns in the home, and so on on -- just a the few of the MANYgovernment-required changes businesses railed against for years. Can regulations be expensive and irksome? No doubt! Now how many children don't have asthma because lead is no longer in gas? Did you think Big Oil would make that change without pressure? NOT.

7:39PM PDT on Oct 6, 2011

What a load of crap, Paul B. You seem to advocate less for the right regulations than NO regulations. As if government is always the villain and business the victims. Gee, just let businesses police themselves, it will all work out in the free market. Yeah, right. First, the great majority of average consumers doesn't know enough to effectively, collectively direct that market on any grand scale. Or, they just don't often enough concentrate that power into a movement that industry will heed. (Take Big Auto. Only by the cumulative weight of poor market decisions, in conjunction with labor and associated costs, did Big Auto eventually succumb to market forces. Had they heeded many buyers and their advocates crying for fuel efficient and breakthrough technology, they might have gotten their heads out of their butts and been building more in-demand product, thus saving themselves instead of needing public money to do it for them.) Second, even if there was some magic public education, businesses would advertise and promo to the nth degree, neutralizing said enlightenment. (If they'll buy Coke and bogus sub-prime mortgages, they'll buy anything...) Third, disbanding EPA will eventually if not quickly lead to more pollution, not less. Businesses will do whatever can be gotten away with. Libertarians complain about regulations, until the formerly regulated engage in clearly detrimental activities that can only be corrected with government pressure.

6:41PM PDT on Oct 6, 2011

It was under the bush and his handlers administration this happened , they did whatever they wanted to do, with creating a war , outsourcing up the wazoo , and some people are saying here that they actually tried to rein in Fannie and Freddie ??? Yaaa right !! Did someone forget how ole neil bush was in on the savings and loan scandal in the 80s and walked away from that scott free cause of his daddy . Google that Mr. paul b. and you will see .

5:59PM PDT on Oct 6, 2011

Basically you can blame Frank and Dodd for the whole Fannie Mae, Freddie Mac housing crisis. If it werent for them pushing lending institutions to lower the requirments for loan eligibily so that "all Americans can enjoy home ownership". And Frank actually conspired with other Democrates to quash any tightening of the lending regulations proposed by the Bush administration. Several years ago it came to my attention That Freddie Mack and Fannie May
were know as the Democratic retirement fund.

2:22PM PDT on Oct 6, 2011

One other change in the real estate should be the bidding wars to sell a foreclosed property for higher than the listed price. Was a time when listed prices were the true price, now it stands for nothing but corporations trying to make more money and robbling the public... Also investors should be banned from buying such properties for their own greed... A property should belong to a person not a corporation or greedy investor.. Especially not to the investor who buy a parcel of land of large acrege to again ruin the beauty of rural Amercia with yet another high riced housing developement or Mall...

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