Is Federal Watchdog A Robo-Signer’s Best Friend?

Fannie Mae failed to establish an “acceptable and effective” way to monitor foreclosure proceedings between 2006 and early 2011, missing chances to catch law firms illegally signing foreclosure documents, the Associated Press reported on September 23, 2011. The Federal Housing Finance Agency’s inspector general said in a report that the FHFA also failed to ensure it was complying with demands that it clean up its programs.

Law firms employed by Fannie Mae were among the mortgage industry employees that engaged in “robo-signing,” in which they signed documents they had not read and used false signatures on foreclosure cases across the country. Fannie was one of the mortgage buyers the FHFA was created in 2008 to oversee, but the inspector general’s report noted the agency has yet to fire or replace employees, issue cease and desist orders or impose any fines despite having the authority to do so. The AP noted that Fannie and Freddie Mac “own or guarantee about half of all U.S. mortgages, or nearly 31 million home loans worth more than $5 trillion,” but the inspector general said in a separate report that the agency lacks examiners to monitor Fannie because just a third of its 120 non-executive examiners are federally accredited.

As state attorneys general and mortgage servicers struggle to reach a settlement over liabilities in the robo-signing scandal, more and more Maryland residents will continue to need real foreclosure help now. Maryland bankruptcy lawyer Kevin D. Judd understands that there are numerous reasons you may be having trouble paying your mortgage, but he can also show you how a Chapter 13 or Chapter 7 bankruptcy process can eliminate bills and stop foreclosure. Whether you have heard of a bankruptcy means test or not, our Maryland bankruptcy attorney is committed to helping clients obtain a “fresh start” and can answer all of your questions when you set up a free initial consultation. Were you or somebody you know victims of the robo-signing scandal? Tell us about your experience. Do you believe the federal government will ever be able to effectively monitor mortgage buyers like Fannie and Freddie?

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