In the last few years homeowners throughout Florida and the entire nation have been victims of illegal foreclosures. In addition to the practice of “robo-signing” foreclosure documents other illegal actions were being taken to foreclose on properties.
Starting as far back as 1997 Fannie Mae retained attorneys in the private sector to assist with not only foreclosures but bankruptcies and evictions as well. This group of law firms known as the retained attorney network was designed to efficiently deal with defaults on mortgages. By 2008, 140 law firms were a part of the group. A recently released federal report by the inspector general of the Federal Housing Finance Agency (FHFA) now indicates that Fannie Mae officials were aware in 2003 that law firms the corporation employed were facilitating foreclosures that were potentially illegal.
Beginning in 2003 Fannie Mae’s outside counsel conducted an investigation wherein it learned that properties were being foreclosed upon based on affidavits and pleadings filed by attorneys in Florida law firms that were false. The corporation claims to have provided this information to a government official in 2006. The recently released report indicates it is unclear whether Fannie Mae’s regulator at the time, the Office of Federal Housing Enterprise Oversight, was made aware of that information.
Current regulator, the FHFA, is reportedly reworking its oversight practices to help avoid similar situations in the future. The agency is hoping to have the new practices in place by the end of next year. In the meantime, it is important for home owners to do all they can to protect their home. An experienced attorney can provide options for your specific situation.
Source: The New York Times, “Fannie Mae Knew Early of Abuses, Report Says,” Gretchen Morgenson, Oct. 3, 2011