The LookoutFannie Mae ignored abusive foreclosure practices for years: report
Government-backed mortgage giant Fannie Mae knew as far back as 2003 that law firms it had hired to foreclose on delinquent borrowers were engaging in extensive abuses, but did little to fix the problem, according to a new report (pdf).
It wasn't until the summer of 2010 that the Federal Housing Finance Agency (FHFA), which oversees Fannie Mae, began looking into the issue. FHFA's inquiry was prompted by news reports that described how law firms working for lenders used practices such as "robo-signing" that unfairly sped borrowers from their homes.
"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, the FHFA's inspector general, who prepared the report. "Increased oversight by F.H.F.A. could help to prevent these abuses."
Rep. Elijah Cummings (D-Md.), who requested the report, called the FHFA's and Fannie Mae's failure to oversee the law firms--known more familiarly as "foreclosure mills"-- an "assault on the integrity of our justice system."
You can read more at The New York Times.
