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Cummings Commends FHFA Decision to Terminate Faulty Foreclosure Attorney Networks

Cummings Commends FHFA Decision to Terminate Faulty Foreclosure Attorney Networks


Washington, DC (Oct. 18, 2011) – Today, Congressman Elijah E. Cummings, Ranking Member of the Committee on Oversight and Government Reform, responded to an announcement by the Federal Housing Finance Agency (FHFA) that it has instructed Fannie Mae and Freddie Mac to begin “transitioning away” from their use of designated foreclosure attorney networks to a system under which “mortgage servicers select qualified law firms that meet certain minimum, uniform criteria.”

“Several of these law firms were able to engage in abusive and illegal behavior that violated the rights of borrowers, in part because of deficient oversight by FHFA, Fannie Mae, and Freddie Mac,” said Cummings.  “In light of the extensive problems recently documented by the FHFA Inspector General, I urged FHFA to seriously consider terminating these attorney networks, and it appears they are implementing my request.”

“I remain concerned, however, that FHFA has not provided specific details about how mortgage servicers will select and oversee law firms to ensure that abusive behavior is prevented,” added Cummings.  “I will continue my oversight efforts to ensure that specific measures are in place to require mortgage servicers to properly oversee the actions of law firms conducting foreclosure proceedings, including those involving mortgages owned or backed by the government sponsored enterprises.”

On February 25, 2011, Ranking Member Cummings launched a major investigation into abuses and illegal activities by mortgage servicing companies, including wrongful foreclosures, inflated fees, and the filing of improperly executed legal documents during the foreclosure process.  As part of that investigation, Cummings sent a letter asking the FHFA Inspector General to examine “widespread allegations of abuse by private attorneys and law firms hired to process foreclosures as part of the ‘Retained Attorney Network’ established by Fannie Mae.”

On September 23, 2011, the FHFA Inspector General issued a report concluding that Fannie Mae and its regulators, including FHFA, were alerted repeatedly to serious problems with the legal firms in Fannie Mae’s retained attorney network (RAN) beginning as early as 2003, but failed to take corrective action.  The Inspector General reported that “FHFA did not begin to act on foreclosure abuse issues involving Fannie Mae’s RAN until mid-2010,” despite “multiple indicators of foreclosure abuse risk prior to 2010 that could have led FHFA to identify and act earlier on the issue.”

On October 3, 2011, Cummings sent a letter to FHFA Acting Director Edward DeMarco requesting additional documents and information regarding these oversight failures.  Cummings requested that the agency “give serious consideration to terminating the existing Fannie Mae Retained Attorney Network program.”  He also requested that “FHFA take immediate and decisive action to remedy these failures and ensure that no additional borrowers suffer similar abuses.”

source: http://democrats.oversight.house.gov

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Fannie, Freddie Said to End Lawyer “Foreclosure Mill” Networks Amid Mortgage Woes

Fannie, Freddie Said to End Lawyer “Foreclosure Mill” Networks Amid Mortgage Woes


Nothing last forever… But now the servicers get to make the call on who they want to use… Already see the drama unfolding.

Bloomberg-

Fannie Mae and Freddie Mac will phase out their foreclosure attorney networks in the wake of the so-called robo-signing scandal, according to two people briefed on the plan.

The Federal Housing Finance Agency, which regulates the mortgage companies, may make the announcement as soon as this week, said the people, who spoke on condition of anonymity because the matter isn’t public.

Fannie Mae has required the mortgage servicers handling its loans to use its Retained Attorney Network for foreclosures and bankruptcy cases. Some lawyers were accused by lawmakers, regulators and consumer groups of mishandling paperwork for evictions and foreclosures, including falsifying signatures on court affidavits. The dispute led many mortgage servicers to suspend foreclosure activity last year.

[BLOOMBERG]

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FHFA’s Oversight of Fannie Mae’s Default-Related Legal Services

FHFA’s Oversight of Fannie Mae’s Default-Related Legal Services


FEDERAL HOUSING FINANCE AGENCY
OFFICE OF INSPECTOR GENERAL

FHFA’s Oversight of Fannie Mae’s
Default-Related Legal Services

[ipaper docId=67473926 access_key=key-1b8gxs6d08w698ktivpm height=600 width=600 /]

 

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Report: Mortgage giant Fannie Mae knew as early as 2003 of extensive foreclosure abuses

Report: Mortgage giant Fannie Mae knew as early as 2003 of extensive foreclosure abuses


Jack Pot! Just take a look at my research from New York cases, but this only goes back to 2004. However, it still demonstrates this was an ongoing pattern with foreclosures.

Question remains will the tax payers continue to bailout these criminal acts?

Red flags sprouted even before… DEPOSITION TRANSCRIPT OF DAVID J. STERN ESQ. FROM 1/19/2000 BRYANT v. STERN

NYT-

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.

[NEW YORK TIMES]

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Freddie Protecting Banks, Not Taxpayers, And Never Mind Homeowners

Freddie Protecting Banks, Not Taxpayers, And Never Mind Homeowners


I’ll say it again, Their days are numbered. Plenty to hide but eventually the cat will come out of the bag!

HuffPO-

For many months, people concerned about the anemic American economy have focused on the housing market, and the reality that many of the nation’s homeowners remain underwater, owing banks more than their homes are worth. Eyes have turned to Fannie Mae and Freddie Mac, the two government-controlled mortgage behemoths that collectively back about half of the nation’s $11 trillion worth of outstanding home loans: If they would forgive a significant slice of this debt for homeowners facing difficulty, that would give borrowers a greater stake in their properties, diminishing the foreclosure crisis. The move would put more money in people’s pockets via lowered mortgage payments — money that borrowers would in turn spend, generating jobs for other people.

But the government body that now supervises Fannie and Freddie, the Federal Housing Finance Agency, has refused to…

[HUFFINGTON POST]

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Evaluation of the Federal Housing Finance Agency’s Oversight of Freddie Mac’s Repurchase Settlement with Bank of America

Evaluation of the Federal Housing Finance Agency’s Oversight of Freddie Mac’s Repurchase Settlement with Bank of America


FEDERAL HOUSING FINANCE AGENCY
OFFICE OF INSPECTOR GENERAL

Evaluation of the Federal Housing Finance Agency’s
Oversight of Freddie Mac’s Repurchase Settlement
with Bank of America

EXPLANATION OF REDACTIONS IN THIS REPORT
This report includes redactions requested by the Federal Housing Finance Agency (FHFA) and the Federal Home Loan Mortgage Corporation (Freddie Mac). According to FHFA and Freddie Mac, the redactions are intended to protect from disclosure material that they consider to be confidential financial, proprietary business, and/or trade secret information, which Freddie Mac claims it would not ordinarily publicly disclose and, if disclosed, could place it at a competitive disadvantage.

[ipaper docId=66614177 access_key=key-vharlbnpqt5jvhin3xf height=600 width=600 /]

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Freddie Faulted on Mortgage Reviews

Freddie Faulted on Mortgage Reviews


Just like his Twin Fannie and their Robo-Machine…it’s just all a mess. I give them a few months and kaput! 

WSJ-

A federal watchdog said Freddie Mac may have given up opportunities to recover billions of dollars in claims over defaulted mortgages and suggested that a January settlement with Bank of America Corp. to resolve $1.3 billion in bad-loan claims was inadequate.

The report is to be released Tuesday by the inspector general for the Federal Housing Finance Agency, which regulates Freddie Mac and its larger cousin, Fannie Mae.

A senior FHFA examiner warned in September 2010, months before the Bank of America settlement, that Freddie “could be passively absorbing billions of dollars in losses” by not more aggressively reviewing defaulted …

[WALL STREET JOURNAL]

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Fannie Mae Cited for Failing to Stop Robo-Signing

Fannie Mae Cited for Failing to Stop Robo-Signing


Once again, without “MERS”, This would not have been made possible. Not only did they give power to 20,000+ certifying officers “VP’s” nationwide the ability to sign any document, it also opened up the possibility to forging, backdating and fabricating them as we’ve seen in court cases!

They knew what was happening.

AP-

Fannie Mae missed chances to catch law firms illegally signing foreclosure documents and its government overseer did not take the right steps to ensure Fannie was doing its job, federal regulators say.

The Federal Housing Finance Agency’s inspector general said in a report Friday that Fannie failed to establish an “acceptable and effective” way to monitor foreclosure proceedings between 2006 and early 2011. Government regulators then failed to ensure it was complying with demands that it clean up its programs.

[ABC NEWS]

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Special report: Legal woes mount for a foreclosure kingpin

Special report: Legal woes mount for a foreclosure kingpin


By Scot J. Paltrow
updated 12/6/2010 2:10:09 PM ET 2010-12-06T19:10:09
.

JACKSONVILLE, Florida — Lender Processing Services is riding the waves of foreclosures sweeping the United States, but in late October its CEO, Jeff Carbiener, found himself needing to reassure investors in the $2.8 billion company.

Although profits were rolling in, LPS’s stock had taken a hit in the wake of revelations that mortgage companies across the country had filed fraudulent documents in foreclosures cases. Earlier in the year, the company, which handles more than half of the nation’s foreclosures, had disclosed that it was under federal criminal investigation and admitted that employees at a small subsidiary had falsely signed foreclosure documents.

Still, Carbiener told the Wall Street analysts in an October 29 conference call that LPS’s legal concerns were overblown, and the stock has jumped 13 percent since its close the day before the call.

But a Reuters investigation shows that LPS’s legal woes are more serious than he let on. Public records reveal that the company’s LPS Default Solutions unit produced documents of dubious authenticity in far larger quantities than it has disclosed, and over a much longer timespan.

Questionable signing and notarization practices weren’t limited to its subsidiary, called DocX, but occurred in at least one of LPS’s own offices, mortgage assignments filed in county recorders’ offices show. And rather than halt such practices after the federal investigation got underway, the company shifted the signing to firms with which it has close business ties. LPS provided personnel to work in the new signing operations, according to information from an LPS spokeswoman and court records including an October 21 ruling by a judge in Brooklyn, New York. Records in county recorders’ offices, and in the judge’s opinion, show that “robosigning” and preparation of apparently false documents went on at these sites on a large scale.

In one instance, it helped set up a massive signing operation at the nearby office of a major client, a spokeswoman for the client, American Home Mortgage Servicing, confirmed. LPS-hired notaries who worked there said in interviews that troves of documents were improperly handled. They said that about 200 affidavits per day were robosigned during the two months the two notaries remained there.

A spokeswoman for LPS confirmed to Reuters that it had helped other firms establish operations that performed the same function. LPS spokeswoman Michelle Kersch didn’t specify which firms. But beginning early in 2010, county recorders’ records show, signing shifted also to law firms under contract with LPS.

Interviews with key players and court records also show that pending investigations and lawsuits pose a bigger threat to the company than Carbiener let on.

The criminal investigation in Jacksonville by federal prosecutors and the Federal Bureau of Investigation is intensifying. The same goes for a separate inquiry by the Florida attorney general’s office. Individuals with direct knowledge of the federal inquiry said that prosecutors have impaneled a grand jury, begun calling witnesses and subpoenaed records from LPS.

The company confirmed to Reuters that it has hired Paul McNulty, former deputy U.S. attorney general in the George W. Bush administration, to represent it in the investigation. A spokeswoman for the U.S. Attorney’s office declined to comment on the probe.

The U.S. Comptroller of the Currency’s office, which is responsible for supervising national banks, also announced in November that it had teamed up with the Federal Reserve to conduct an on-site examination of LPS.

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