Sunday, February 12, 2012

Fannie: 'UBS Peddled Mortgage Packages Loaded With Crappy Loans!'

Legal Newsline reports:

  • Summaries of 24 mortgage loans paint a heart-breaking picture of routine dishonesty that brought down America's house of cards. Conservators of Federal National Mortgage Association filed the summaries in federal court in December, to support a claim that "Fannie Mae" relied on bad information from lenders when guaranteeing packages of loans.

  • "A forensic review of loan files has revealed pervasive failure to adhere to underwriting guidelines," conservators wrote. Conservators wrote that in a random review of 996 loans that UBS Securities packaged, 78 percent were not underwritten in accordance with applicable guidelines.

  • They also wrote that a review of 363 defaults revealed that 99 percent were not underwritten according to guidelines. Fannie Mae sued UBS and other big lenders last year, seeking to recover billions it lost in the mortgage meltdown that started in 2008.

  • Lenders deny responsibility, claiming they didn't know that loan originators loaded mortgage applications with lies. What no one could see a few years ago appears monstrous in hindsight.

For more, see Fannie Mae offers examples of routine dishonesty in its fight against lenders.

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