http://exposecorruptcourts.blogspot.com/2011/07/da-stole-his-life-justices-took-his.html
http://lawenforcementcorruption.blogspot.com/2009/02/when-policeofficers-lie.html
http://www.nypost.com/p/news/business/house_of_cards_hNdx5fNGt6o
Ol1U9mTW0HN/1
http://lawenforcementcorruption.blogspot.com/2009/02/when-policeofficers-lie.html
Foreclosure Fraud – Fighting Foreclosure
Fraud by Sharing the Knowledge
50 State Attorneys General, Beware, It’s a Trap | NY Post Probe Finds
“Problems” in 92% of Bank Foreclosure Filings
Posted by 4closureFraud on August 15, 2011 · 4 Comments
And in a stunning 37 out of 40 cases, The Post discovered a broken chain of title from
the original lender to the company now making claim against a local family for its
home and thousands of dollars in questionable fees.
~
It took Abigail Fields a short time to confirm the banks paperwork “problems” were
pervasive. Now the NY Post hits it out of the park. With all this, and the recent reports
from Reuters and the Associated press on Robo-signing, you would think the 50 State
AG’s would see this for what it really is. The biggest PONZI scheme in the history of the
world…
From the NY Post…
~
House of cards – Post probe finds problems in bank foreclosure
filings
The banks still just don’t get it.
In a staggering 92 percent of the claims brought by creditors asserting the right to
foreclose against bankrupt families in New York City and the close-in suburbs, banks and
mortgage servicers couldn’t prove they had the right to kick the families out on the street,
a three-month probe by The Post has shown.
But that didn’t stop the banks from trying.
By robosigning documents and pressing foreclosures without the proper paperwork,
banks have attempted to steamroll their way over sometimes-outgunned homeowners,
The Post has uncovered.
But homeowners and the courts are starting to fight back.
Forced to finally face the mess, banks find themselves driven to the bargaining table,
where they now hope to win a global settlement with all 50 states and the federal
government. The tangled, complex mess in New York shows how tough — and
expensive — such a settlement could be for the banks.
The Post dug through more than 150 Chapter 13 bankruptcy filings from June 2010 in
New York’s Eastern and Southern federal court districts — covering the five boroughs,
Long Island and nearby northern counties including Westchester–in search of local
foreclosure or pre-foreclosure cases. We then put together a random sample of 40 cases
where creditors such as banks — but more often loan servicers — filed proofs of claim
for first mortgage debt.
The research unearthed claims riddled with robosigners, suspicious documents and
outrageous fees. And in a stunning 37 out of 40 cases, The Post discovered a broken
chain of title from the original lender to the company now making claim against a local
family for its home and thousands of dollars in questionable fees.
Check out the rest here…
~
4closureFraud.org
Subscribe to this author's posts feed via RSS
Related posts:
1. Karl Rove on Robo-signing, Fraudclosures and a Bank Settlement, “Justice and
the state attorneys general are demanding $20 billion for sloppiness”
2. SunTrust Finds Problems in Foreclosures, Admits to 4,000 Counts of Perjury
3. Senators Urge OCC to Work with State Attorneys General, DOJ, and HUD to
Hold Mortgage Servicers Accountable and Prevent Future Abuse
4. Bank Of America Faces New Probe; New York Attorney General Launches
Investigation Into Mortgage Securitization
5. PB Post | Problems with Foreclosure Notices Loom as Next Flaw in Process
House of cards
Post probe finds problems in bank foreclosure filings
By CATHERINE CURAN
Last Updated: 4:00 AM, August 14, 2011
Posted: 10:04 PM, August 13, 2011
More
Print
EXCLUSIVE
The banks still just don't get it.
In a staggering 92 percent of the claims brought by creditors asserting the right to
foreclose against bankrupt families in New York City and the close-in suburbs, banks and
mortgage servicers couldn't prove they had the right to kick the families out on the street,
a three-month probe by The Post has shown.
But that didn't stop the banks from trying.
By robosigning documents and pressing foreclosures without the proper paperwork,
banks have attempted to steamroll their way over sometimes-outgunned homeowners,
The Post has uncovered.
But homeowners and the courts are starting to fight back.
Forced to finally face the mess, banks find themselves driven to the bargaining table,
where they now hope to win a global settlement with all 50 states and the federal
government. The tangled, complex mess in New York shows how tough -- and expensive
-- such a settlement could be for the banks.
The Post dug through more than 150 Chapter 13 bankruptcy filings from June 2010 in
New York's Eastern and Southern federal court districts -- covering the five boroughs,
Long Island and nearby northern counties including Westchester--in search of local
foreclosure or pre-foreclosure cases. We then put together a random sample of 40 cases
where creditors such as banks -- but more often loan servicers -- filed proofs of claim for
first mortgage debt.
The research unearthed claims riddled with robosigners, suspiciousdocuments and
outrageous fees. And in a stunning 37 out of 40 cases, The Post discovered a broken
chain of title from the original lender to the company now making claim against a local
family for its home and thousands of dollars in questionable fees.
In other words, the bank or mortgage servicer filing the claim failed to prove it has any
right at all to make a claim it was owed the debt or that it could seize the home in
question.
The Post looked at Chapter 13 filings because the banks or mortgage servicers file proofs
of claim for the debt and must, under penalty of perjury, include accurate information
about the mortgage, note and fees. In New York, filing public records with "intent to
deceive" is a felony.
EXPERIENCED foreclo sure defense lawyers who reviewed some of these cases for The
Post say the findings reflect a widespread pattern of malfeasance by banks and loan
servicers that has gone largely unchallenged for far too long.
"In-court borrowers are by definition broke and can't hire document experts, but anybody
who knows this terrain knows that stuff that looks this suspicious almost certainly is
fraud," says financial industry expert Yves Smith. "There are too many miraculous copies
of documents showing up at the eleventh hour and nonsense like that to think this is
clean."
Read more:
http://www.nypost.com/p/news/business/house_of_cards_hNdx5fNGt6oOl1U9mTW0H
N#ixzz1V6du79ln
House of cards
Post probe finds problems in bank foreclosure filings
By CATHERINE CURAN
Last Updated: 4:00 AM, August 14, 2011
Posted: 10:04 PM, August 13, 2011
More
Print
EXCLUSIVE
And attorneys say that despite banks' and servicers' pledges to clean up their act after the
robosigning scandal came to light last fall, they are still relying on phony documents to
boot New York families out of their homes.
"The largest financial institutions in the US are doing it every day, and I have not seen it
slow down or stop," says Westchester attorney Linda Tirelli. "The game is always the
same: Make up documents and foreclose as fast as you can."
Many homeowners have no lawyer to help them sort through the paperwork that servicers
file, but some judges have been casting a sharply critical eye.
Just last month, Judge Arthur Schack dismissed a foreclosure by HSBC Bank against a
Brooklyn homeowner, lambasting the bank and its lawyers for using robosigners and
making false statements. He also ordered the bank's CEO to come into court and explain
why HSBC shouldn't be slapped with a penalty.
Since last fall, New York's chief Judge Jonathan Lippman has tried to address what he
called deep flaws in the foreclosure process by requiring any attorney bringing a
foreclosure action to sign an affidavit that the accuracy of supporting documents was
verified first.
New York's attorney general, Eric Schneiderman, has recently started pushing back hard
against the banks, dashing their hopes of a quick deal with blanket immunity from
prosecution.
"This certainly deserves an intensive investigation by the Department of Justice and
attorneys general -- a criminal investigation" says O. Max Gardner III, a North Carolina
foreclosure defense attorney and a national expert on the inner workings of such cases.
CONTACTED about The Post's findings, the American Bank ers Association shrugged
them off as "specific lawsuits impacting specific stakeholders rather than an industry at
large."
In tracing the chain of title in these claims, The Post uncovered a pattern of problems
centered on mortgage assignments -- used when a mortgage is sold to a third party -- and
endorsements of notes, which is the paperwork that rides with the transfer of the
mortgage giving the holder a rightful claim to foreclose.
These included:
* Missing or highly questionable endorsements of notes.
* Questionable timing of documents, including mortgage assignments by companies that
were no longer in business on the date of the assignment.
* Signatures by robosigners -- individuals who slapped their signature on hundreds of
affidavits without attesting to their accuracy -- on mortgage assignments.
* Proof-of-claim filings by mortgage servicers without documentation of their legal right
to do so on behalf of the owner of the loan.
* Assignments created after the debtor filed for bankruptcy, when the law prevents a
creditor from making any new claims.
* Mortgage assignments directly from the originator to the trustee for the securitized
trust, bypassing the necessary intervening steps of transfer to the sponsor and depositor.
Most of the cases The Post reviewed had numerous red flags.
The cost to clean up this mess could run into the trillions, according to Georgetown
University Law Center Professor Adam Levitin's congressional testimony last fall.
"What we're talking about is the creation of rights, and if someone forecloses on a home,
at the time they foreclose, they have to have a legitimate right to do so," says Prentiss
Cox, professor at the University of Minnesota Law School. "You can't foreclose and then
go back and create the right."
Home invasion
A Post probe revealed 92 percent of metro-area foreclosure actions had legal problems
with paperwork in June of last year. Here are three properties that were taken from
families under false pretenses and the problems with the filings.
Case #1
Blank endorsement page with robo-signator. This means the mortgage note was never
transferred properly.
Case #2
Mortgage servicer brought action without needed paperwork for proof-of-claim need that
servicer had standing in court .
Case #3
Mortgage transfer made after initial foreclosure filing is dated. Filing also had robosigner
on other documents.
Research assistance by Wilson Dizard
Read more:
http://www.nypost.com/p/news/business/house_of_cards_hNdx5fNGt6oOl1U9mTW0H
N#ixzz1V6e5aWdT
Fannie Mae promises to keep families in
homes, but instead pressures banks to
foreclose
12:26 AM, Aug. 14, 2011 |
199 Comments
Purchase Image
Leisa Fenton and Steve Fenton talk about how they were working with their bank to stay in
their Clarkston home when they were foreclosed on, anyway. Their loan was owned by
Fannie Mae, which was supposed to work with families trying to save their homes from
foreclosure. / January photo by WILLIAM ARCHIE/Detroit Free Press
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BY JENNIFER DIXON
DETROIT FREE PRESS STAFF WRITER
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Filed Under
Local News
Michigan
Robert Ficano
Southfield
Zoom
Key documents
Last summer, Fannie Mae executives decided the mortgage giant was “suffering delays in
the processing of its foreclosures.”
These documents reveal how Fannie Mae addressed those delays, including a letter to
GMAC Mortgage spelling out its new policies to assess compensatory fees and require
banks to get its written permission to delay foreclosure sales on loans more than 12
months in arrears. The records also include letters to six lenders setting performance
goals for the third quarter of 2010.
Tell us your story
Have you been through the nightmare of foreclosure? Have you struggled to get help
from the federal government's Making Home Affordable programs or the Hardest Hit
Fund? Do you have a tale to tell? E-mail your story, 300 words or less, along with your email address and phone number, to getpublished@freepress.com or by using the "Submit
News" tab on the Free Press smartphone app. We'll select the best and share them on
freep .com .
Related Links
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Inside Fannie Mae: Confidential records show how Fannie Mae breaks the rules
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Programs for financially troubled homeowners haven't helped much to date
Who are Fannie Mae and Freddie Mac?
How metro Detroit homeowners can get help
One family's story of heartbreak in mortgage scandal
How metro Detroit homeowners can get help
Real estate brokers just want to move homes
Fannie Mae and Freddie Mac's fire sales are crippling metro Detroit communities,
leaders say
Who are Fannie Mae, Freddie Mac?
Interactive map: Fannie Mae, Freddie Mac metro Detroit foreclosures sales
compared to market value
Inside Fannie Mae: Confidential records show how Fannie Mae breaks the rules
How metro Detroit homeowners can get help
Who are Fannie Mae and Freddie Mac?
Programs for financially troubled homeowners haven't helped much to date
One family's story of heartbreak in mortgage scandal
How this report was compiled
Accountability, answers about Fannie Mae's foreclosure policy are lacking
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First of three parts
Inside Fannie Mae: Confidential records show how Fannie Mae breaks the rules | How
metro Detroit homeowners can get help | Who are Fannie Mae and Freddie Mac? |
Programs for financially troubled homeowners haven't helped much to date | One family's
story of heartbreak in mortgage scandal | How this report was compiled | Accountability,
answers are lacking
In early December, a senior executive at Fannie Mae assured members of the Senate
Banking Committee in Washington that the mortgage giant was doing everything
possible to address the foreclosure crisis.
"Preventing foreclosures is a top priority for Fannie Mae," Terence Edwards, an
executive vice president, told the panel. "Foreclosures hurt families and destabilize
communities."
But confidential documents obtained by the Free Press show that Fannie Mae has pushed
an agenda at odds with those public assurances.
The records cover Fannie Mae's foreclosure decisions on more than 2,300 properties, a
snapshot from among the millions of mortgages Fannie handles nationally. The
documents show Fannie Mae has told banks to foreclose on some delinquent
homeowners -- those more than a year behind -- even as the banks were trying to help
borrowers save their houses, a violation of Fannie's own policy.
Fannie Mae has publicly maintained that homeowners would not lose their houses while
negotiating changes to mortgages under the federal Home Affordable Modification
Program, or HAMP.
The Free Press also obtained internal records revealing that the taxpayer-supported
mortgage giant has told banks that it expected them to sell off a fixed percentage of
foreclosed homes. In one letter sent to banks around the country last year, a Fannie vice
president made clear that Fannie expected 10%-12% of homes in foreclosure to proceed
to sale.
Taken together, the documents offer an unprecedented window into how Fannie decides
whether to allow borrowers to exhaust all options to keep their homes. "It's scary, it really
is," said Leisa Fenton of Clarkston, who is among an untold number of people whose
homes were sold in foreclosure even though they had been assured their homes were safe
while they sought mortgage relief from Washington.
Her family's home was sold at auction in October. "We just keep praying the Lord is
going to work it out," she said.
Alan White, a law professor at Valparaiso University and a leading national expert on the
foreclosure crisis, reviewed the records for the Free Press and said they show Fannie Mae
-- which is regulated by the Federal Housing Finance Agency -- is sabotaging the nation's
foreclosure prevention efforts and helping drive down home values.
"Fannie just wants to clean up its balance sheet and get these loans off the books while
taxpayers are eating these losses," White said, referring to the multibillion-dollar federal
bailout of Fannie Mae in 2008 and the rising cost to taxpayers.
"And Treasury and the FHFA are letting them get away with it. It's a huge waste. Wealth
is being destroyed, people are losing houses needlessly, and taxpayers are losing money."
Fannie Mae officials declined to be interviewed and would not address the issues raised
in the records obtained by the Free Press, including a lengthy series of questions provided
by e-mail.
But a former Fannie Mae executive, Javid Jaberi, whose name is on some of the
documents, said the internal records merely reflect an effort by Fannie Mae to get banks
to respond more quickly when loans are delinquent, even if that means pushing some
foreclosed homes to sale.
In an interview Wednesday, Jaberi said there is plenty of blame to go around. Borrowers
often didn't understand their options. Banks weren't doing enough to help borrowers to
get mortgage relief. And HAMP's documentation rules, he said, were too complex.
"Everyone is to blame," Jaberi said, including Fannie Mae.
Fannie spokesman Andrew Wilson said in a statement Fannie is "committed to
preventing foreclosures whenever possible."
"We encourage homeowners to reach out as early as possible ... to pursue modifications
and other foreclosure prevention solutions."
Various lenders -- Bank of America, GMAC Mortgage, CitiMortgage and Chase -- would
not discuss Fannie's policies.
Records reveal foreclosure tactics
Fannie Mae and many of the nation's top banks have faced considerable criticism for
doing little to stem foreclosure sales, which grew by 1.6 million last year. Investigations
by other news media outlets showed that Fannie Mae (and the banks that directly service
home loans) help only a sliver of people promised relief, and often delay or bungle
applications for modifications. Other reports showed Fannie has punished banks that
were too slow to foreclose.
The documents obtained by the Free Press indicate, for the first time, that Fannie wasn't
simply indifferent to helping homeowners, but launched a concerted effort to force
seriously delinquent borrowers from their homes.
Fannie's foreclosure policy -- what an August 2010 document calls "our new delay
initiative" -- focused on homeowners more than 12 months late on their mortgages,
including people actively negotiating loan modifications. That stance conflicts with the
government's (and Fannie's) rules, which are meant to insulate people while they seek
loan relief under HAMP.
Mortgage companies, of course, can't wait forever for delinquent borrowers to catch up
on their payments. But critics argue that Fannie Mae's confidential foreclosure policy is
not only at odds with its public assurances, but adds to the inventory of vacant homes
across the nation and lowers property values for everyone.
According to White, the Valparaiso professor, foreclosing on a home typically costs
Fannie Mae far more than a successful loan modification. But, he and others say, Fannie
is willing to absorb higher losses because it knows taxpayers -- not Fannie Mae -- will
eventually reimburse the loss.
Since 2008, when the government took over Fannie Mae and its sister company, Freddie
Mac, the mortgage giants have cost taxpayers $141 billion, with estimates that the bill
could eventually reach as high as $389 billion.
Fannie Mae and Freddie Mac are significant players in the foreclosure crisis; they own or
guarantee more than half of all existing single-family mortgages and about two-thirds of
all new U.S. home mortgages. Fannie also administers the U.S. Treasury Department's
$29.9-billion foreclosure prevention initiative -- Making Home Affordable, which
includes HAMP -- that was launched by President Barack Obama in 2009.
Everyone loses
Fannie Mae doesn't lend directly to homeowners. It buys loans from banks, guarantees
them, and relies on the banks to service the loans directly. Fannie funds its mortgage
investments by issuing debt securities in domestic and international capital markets.
Fannie Mae, according to rules outlined on its Web site, has told banks that service its
loans that they "should not proceed with a foreclosure sale" until a borrower has been
evaluated for a loan modification under HAMP. That squares with HAMP's written rules,
which forbid banks from completing foreclosures without first weighing a person's
eligibility for a modification.
According to RealtyTrac, which tracks U.S. foreclosures, 1.6 million homes were sold in
foreclosure last year, including 78,704 in Michigan. It's unclear from the records how
many could have kept their homes had Fannie not enacted its confidential foreclosure
policy.
Metro Detroit leaders say Fannie Mae's actions are destabilizing neighborhoods and
driving down home values. They pleaded with federal regulators to help.
"Local governments are trying to keep people in their homes and keep property values
up, and here you have a government bureaucracy ripping (those efforts) to shreds," said
Wayne County Executive Robert Ficano.
"It doesn't make sense."
Adam Taub, a Southfield lawyer who works with people trying to save their homes, said
Fannie is "being very, very aggressive, very proactive, in trying to kick people out. ...
They're putting a lot of pressure on" the banks.
He said he had several cases in which banks were willing to modify loans but Fannie Mae
was unwilling to cooperate. He said he had no way to know whether Fannie's policy
affected those cases.
"They're making their books look better, and making neighborhoods look worse, and that
hurts everybody's property values," Taub said.
The confidential records reviewed by the Free Press include notations on more than 2,300
homes in which banks asked Fannie to delay foreclosure sales while homeowners sought
modifications or other relief, including short sales -- in which a lender lets the borrower
sell a home for less than what is owed.
In one instance, from August 2010, Bank of America requested a 45-day delay for a
Wisconsin homeowner who owed $124,610 and was 32 months delinquent. The bank
said the borrower was applying for a loan modification through HAMP and "it appears
that all financial documents have been received and we are waiting for an underwriter to
be assigned."
Fannie Mae's response: "Per our new delay initiative, any loan over 12 months deliq must
be on an active payment plan with monthly payments coming in. Therefore, this request
to postpone is declined. Please proceed to sale."
IndyMac Mortgage Services sought a delay for a Hawaii borrower who provided all
records required by HAMP. The homeowner, 22 months behind, owed $412,225. Fannie:
"Proceed with foreclosure."
The records do not identify any homeowners by name.
Wilson, the Fannie Mae spokesman, would not address these or other specific documents,
saying only that Fannie evaluates delay requests case by case and has approved some
delays "if the situation warranted it."
Indeed, Fannie officials approved some brief delays, records show -- with conditions.
In October, Bank of America sought a delay for a California borrower who was 24
months behind, owed $230,449 and had filled out a HAMP loan package. Fannie agreed
to delay sale until early November, but noted:
"BANK OF AMERICA RESPONSIBLE FOR ALL FEES/COSTS ASSOCIATED
WITH THIS POSTPONEMENT DUE TO DELAY IN PROCESSING ... DOCS
TIMELY."
Meg Burns, chief of policy at FHFA, which oversees Fannie Mae, said foreclosure sales
are delayed "all the time. We suspend foreclosure processing all the time. ... There are
plenty of postponements."
Burns said if anyone is to blame for home losses, it's the banks for not dealing sooner
with homeowners.
FHFA officials also noted that Fannie and Freddie are adopting new rules in October that
provide incentives and penalities to encourage servicers to work with delinquent
borrowers at an early stage.
Edward DeMarco, FHFA's acting director, has said the new policies should give
homeowners a greater understanding of the process and minimize taxpayer losses by
ensuring loans are serviced efficiently and fairly.
FHFA also noted that since Fannie and Freddie were taken into conservatorship, they
have completed more than 900,000 loan modifications.
Fannie Mae's foreclosure policy is also being applied to seriously delinquent borrowers in
programs other than HAMP, records show.
In one case last October, Bank of America sought a delay for a Michigan borrower
seeking a loan modification who owed $65,542 and was two years behind, but whose
finances were improving.
"Borrower is reflecting positive monthly cash flow of $914.77 and may be able to afford
a modified payment," the bank wrote. Fannie refused, noting the lengthy delinquency:
"Proceed to sale."
Ira Rheingold, executive director of the National Association of Consumer Advocates,
said, "It's rarely in anyone's best interest to kick out a struggling homeowner who is
trying to stay in their home, particularly in cities like Detroit whose housing market is
devastated."
He said it's absurd Fannie is taking actions "devastating to the homeowners and
communities they're supposed to be serving. It really is obscene."
Jamison Brewer, a lawyer with Michigan Legal Services in Detroit, said Fannie's actions
are contrary to what borrowers seeking modifications are being told -- that foreclosure
sales are put on hold while they apply for HAMP.
"Our tax money went into Fannie," he said. "It's just ridiculous."
Requests for short sale delays are likewise being denied, the internal records show.
In October, Bank of America sought a delay for a California borrower who owed
$416,786, was 13 months behind, and trying to close a short sale. "LOAN IS IN
DOCUMENT COLLECTION PHASE," the bank noted. "FILE HAS HAD 0 PREVIOUS
POSTPONEMENTS." Fannie Mae declined, noting simply, "Too delinquent."
Sticking taxpayers with the losses
White, the Valparaiso professor, said Fannie's decision to target homeowners who are
more than a year delinquent doesn't allow for changes in some people's financial
situations, such as a new job or higher pay.
He is among a bipartisan collection of critics who say Fannie is less concerned with
helping homeowners than in pushing the cost of troubled mortgages to taxpayers.
For example, White said, if a home with a $200,000 mortgage is foreclosed and Fannie
nets $80,000 from its sale, Fannie loses $120,000. But because Congress authorized the
Treasury Department to reimburse Fannie as part of the government's takeover, taxpayers
eat the losses.
"Fannie would rather foreclose all the bad and marginal mortgages now, even at very
high loss rates, while losses are on the taxpayer, so that when it is once again a private
company, these risky mortgages will be gone, and will not result in losses for its
shareholders," he said.
"Treasury and Congress have given Fannie a blank check, but Fannie knows the
checkbook will be taken away sooner or later."
Fannie Mae has made it difficult in other ways for borrowers to keep their homes.
Take the case of a woman represented by lawyer Lorray Brown of the Michigan Poverty
Law Program.
The Eaton County woman lost her home in foreclosure and was facing eviction when she
persuaded a bank to lend her $170,000 to buy the property back from Fannie Mae. Brown
said Fannie initially rejected her client's offer, insisting on the full $184,000 the woman
owed -- $14,000 more than the woman could raise.
Fannie did not accept the woman's offer until January, after months of wrangling. Had
Fannie Mae won the fight, it would certainly have spent more than $14,000 on legal fees
and foreclosures costs while displacing a family and leaving another home vacant.
Fannie lawyers referred questions to headquarters, which declined to comment.
Well before Edwards, the Fannie Mae executive, testified before the Senate committee
that the mortgage giant was doing all it could to prevent foreclosures, Fannie Mae was
making plans to punish banks that were not selling foreclosed homes quickly enough,
records show. The records obtained by the Free Press buttress documents reported by the
Washington Post earlier this year.
"Fannie Mae is suffering delays in the processing of its foreclosures," according to one
unsigned, Aug. 31, 2010, memo. The memo, a "talking points" summary for Fannie Mae
management, outlined its plans to fine banks for delaying foreclosure on seriously
delinquent homeowners.
As an example, the memo notes, a bank would be fined $5,218 at the time of foreclosure
on a house with a mortgage balance of $121,000 and 22 months late.
The memo said Fannie Mae was initially targeting mortgages 18 or more months
delinquent to "scrub and clean up servicers' existing portfolios."
In a June 18, 2010, letter, Jaberi, then Fannie Mae's vice president, also cited fines in a
letter to GMAC.
"Fannie Mae urges you to begin more closely managing delays in the processing of our
foreclosure cases as soon as possible," Jaberi wrote, adding: "You must keep the contents
of this letter and the requirements confidential."
In the interview Wednesday, Jaberi confirmed that versions of that letter went to all
banks that serviced Fannie Mae mortgages.
Fannie Mae also sent letters in June 2010 warning at least six lenders that Fannie
projected and expected "approximately 10%-12% of monthly foreclosure inventory will
go to sale."
Bert Ely, a banking consultant based in Alexandria, Va., who reviewed the letters for the
Free Press, said they show Fannie "wants to force these default situations into a
foreclosure sale" and raised questions about whether Fannie is setting arbitrary targets.
"When you have a uniform approach like that, it makes you wonder whether they are just
pushing action by the servicers irrespective of local market conditions," he said.
Kurt Eggert, a law professor at Chapman University in Orange, Calif., who has testified
before Congress on mortgage issues, said it's unrealistic to expect banks to hit uniform
targets because "they have a different mix of mortgages. ... And some are much better at
modifying mortgages than others."
Jaberi denied that Fannie took a cookie-cutter approach with banks. Fannie was merely
"trying to create a dialogue between Fannie Mae and the servicer. ... These are
nonperforming assets and need to be resolved. ... We were putting more pressure on the
servicers to do their jobs."
Alys Cohen, staff attorney for the National Consumer Law Center, noted that Fannie
threatened no punishment to banks that denied a loan modification to qualified
homeowners, but did threaten to punish banks that didn't foreclose fast enough.
"That results in many qualified homeowners ending up in foreclosure," she said.