Tuesday, September 27, 2011

Federal Agency Inspector General: Fannie Had Chance To Catch Its Law Firms Manucaturing Phony Foreclosure Documents & Blew It!

The Associated Press reports:

  • 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.

  • Mortgage industry employees — including law firms employed by Fannie Mae — signed documents they hadn't read and used fake signatures on foreclosure cases across the country.

  • The practices, known collectively as "robo-signing," resulted in a suspension of foreclosures last fall and a probe by all 50 state attorneys general into how corners were cut to keep pace with the crush of foreclosure paperwork.

For more, see Fannie Mae cited for failing to stop robo-signing.

For the Federal Housing Finance Agency Inspector General's report, Evaluation of Whether FHFA Has Sufficient Capacity to Examine the GSEs (EVL-2011-005, September 23, 2011).

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