Fannie Mae, the mortgage finance giant, learned as early as 2003 of extensive foreclosure abuses among the law firms it had hired to remove troubled borrowers from their homes. But the company did little to correct the firms’ practices, according to a report issued Tuesday.
Only after news reports in mid-2010 began to describe the dubious practices, like the routine filing of false pleadings in bankruptcy courts, did Fannie Mae’s overseer start to scrutinize the conduct. The report was critical of that overseer, the Federal Housing Finance Agency, and was prepared by the agency’s inspector general.
In one notable lapse, even after the agency reported problems to Fannie Mae in late 2010 about some of the approved law firms, it did not request a response from the company, the report said.
“American homeowners have been struggling with the effects of the housing finance crisis for several years, and they shouldn’t have to worry whether they will be victims of foreclosure abuse,” said Steve Linick, inspector general of the finance agency. “Increased oversight by F.H.F.A. could help to prevent these abuses.”
The report is the second in two weeks in which the inspector general has outlined lapses at both the Federal Housing Finance Agency and the companies it oversees — Fannie Mae and Freddie Mac. The agency has acted as conservator for the companies since they were taken over by the government in 2008. Its duty is to ensure that their operations do not pose additional risk to the taxpayers who now own them. The companies have tapped the taxpayers to cover mortgage losses totaling about $160 billion.
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Everyone knew about “liar loans” and the infamous “NINJA” (NO income, no job,no assets)loans. THey were considered an major advance in finance that would enable Americans to live well beyond their means, while making big profits for the banks, who generous shared the wealth with office holders of both parties.
It was ignorance or incompetence that did them in, it was stupidity mixed with greed. And it wasn’t just the banks or the agencies, but includes the millions of Americans who thought that real estate would always go up, and confused their houses with ATM machines.
Thank you Barney Faygie Frank, Chris Dudd, Barack Hussein Obama mmmmm mmmmm mmmm for the Freddie/Fanny debacle.