Connect with us

Hi, what are you looking for?

The American GeniusThe American Genius

Housing News

FHFA uncovers abuse, dismantles Fannie & Freddie’s lawyer network

FHFA forces Fannie and Freddie to comply

A recent Federal Housing Finance Agency (FHFA) report noted that since 2003, Fannie Mae and Freddie Mac knew that the law firms they had hired were fudging foreclosures so they could get paid by the number of foreclosures. Freddie Mac fired the firms, Fannie Mae said it would cost $5 million to transfer the files to another firm, they couldn’t afford to do so, and they refused, keeping on payroll the very law firms that had processed false foreclosures and abused the American public.

Now, the FHFA which regulates Fannie and Freddie is directing the agencies to transition away from their current foreclosure attorney network programs and move to a system where mortgage servicers will select law firms based upon uniform criteria as well as minimum qualifications as opposed to the current system wherein Fannie and Freddie assign law firms for each state based on their own separate criteria. The new system will be more uniform and servicers will be allowed to choose from a list of qualified firms.

Improving the foreclosure process

“FHFA believes these efforts will lead to greater transparency and benefit delinquent borrowers who become subject to the foreclosure process,” the FHFA said in a statement. “Further, the change will be supportive of the Consent Orders entered into by financial regulators and servicers.”

FHFA has ordered Fannie and Freddie to work together (a task that often eludes the Fannie half of the equation) to create and put into effect consistent policies, requirements and processes for managing foreclosure related legal services.

Advertisement. Scroll to continue reading.

The dismantling of the current networks will take place after a transition period in which FHFA will seek input from regulators, servicers, lawyers and others, during which the existing contracts will remain in place so that foreclosures continue to be processed.

Tara Steele is the News Director at The American Genius, covering entrepreneur, real estate, technology news and everything in between. If you'd like to reach Tara with a question, comment, press release or hot news tip, simply click the link below.


Leave a Reply

Your email address will not be published. Required fields are marked *


American Genius
news neatly in your inbox

Subscribe to our mailing list for news sent straight to your email inbox.




Housing News

(Housing News) Fannie Mae is offering incentives on foreclosures, and while many homeowners are unaware, many agents are as well - time to take...

Housing News

(Housing News) Once thought an impossibility, the controversial Mel Watt has been confirmed as the next head of the FHFA, which some say is...

Housing News

Bank of America will shell out $404 million to settle their final claim between the big bank and Freddie Mac and Fannie Mae, covering...

Housing News

With talks of Fannie Mae and Freddie Mac being shuttered, there are implications many are not talking about.

The American Genius is a strong news voice in the entrepreneur and tech world, offering meaningful, concise insight into emerging technologies, the digital economy, best practices, and a shifting business culture. We refuse to publish fluff, and our readers rely on us for inspiring action. Copyright © 2005-2022, The American Genius, LLC.