Fannie Fires 100+ For Fraud

[Elliott]

[td] Both Freddie and Fannie have a history of misrepresenting their activities to the public, investors and Congress, from concealing trillions in toxic Alt-A loans, stated-income loans and negatively amortizing loans leading up to the 2007-2008 financial crisis. They required a combined federal bailout of nearly $200 billion in 2008. In the past, both entities have been caught using accounting methods that underreport expenses and inflate income. In 2011, the Securities and Exchange Commission filed civil fraud charges against former Fannie Mae CEO Daniel Mudd, former Freddie Mac CEO Richard Syron and four other former executives. In 2015, the case against Freddie Mac execs settled with Syron paying $250,000, former chief business officer Patricia Cook paying $50,000, and former vice president of credit policy Donald Bisenius paying just $10,000. The settlement was unusual as it allowed the three executives to continue to deny wrongdoing. Mudd settled his case a year later for $100,000, a sum paid for by Fannie Mae. It was sofa change compared with the $24 million he earned from Fannie Mae from 2006 to 2008. We can only hope this week’s firings were not a token gesture but the beginning of a purge of bad actors from of this rogue organization. ​ # # #​ Jeremy Bagott is a real estate appraiser and former newspaperman. His most recent book, “The Ichthyologist’s Guide to the Subprime Meltdown,” is a concise almanac that distills the cataclysmic financial crisis of 2007-2008 to its essence. This pithy guide to the upheaval includes essays, chronologies, roundups and key lists, weaving together the stories of the politics-infused Freddie and Fannie; the doomed Wall Street investment banks Lehman and Bear Stearns; the dereliction of duty by the Big Three credit-rating services; the mayhem caused by the shadowy nonbank lenders; and the massive government bailouts. It provides a rapid-fire succession of “ah-hah” moments as it lays out the meltdown, convulsion by convulsion. ​ # # # -END-​ ​ ​

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[Bobby Bucks]

For obvious reasons the federal government, major media and politicians in both parties aren't watching Fannie, but we can be assured this guy is watching every move they make. Tainted hybrid mortgages may be the next opportunity for those in credit default swaps.

https://www.michael-burry.com/michael-burry/



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[Mejappz]

The Federal 'blacklist' making it impossible to sell California condos​

MSN

 

[TerryRohrer]

For obvious reasons the federal government, major media and politicians in both parties aren't watching Fannie, but we can be assured this guy is watching every move they make. Tainted hybrid mortgages may be the next opportunity for those in credit default swaps.

https://www.michael-burry.com/michael-burry/



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He made these remarks in 2010. They are even more true now, just with bigger numbers:

"On who is to blame for the financial crisis:
“My number one concern is that there has been a complete utter total abdication of personal responsibility though out our entire society. I don’t think anyone anywhere is taking blame themselves for what they did to contribute to the crisis. And again I think it gets back to that blame game. It is the most damaging thing we can do as a country is to blame a narrow set and not look within ourselves for what each of us did or didn’t do to the basic wrong that led to this mess.”

“From the borrower to the average broker all the way to the federal reserve through Congress, the President, several Presidents, I think that this has been coming for awhile and there has been a lessening of the credit standards over a period of time that ultimately led to the kind of blow off top that we have.”

On the current housing market:

“It’s an artificial market. There are a tremendous number of homes where the home homeowner, I think it’s between 2.5 to 3 million homes, where the home homeowner are more than 9 months past due and are not giving notices that they are past due and they’re just living there for free. I actually know one that has been there for a few years without having to pay anything. I think that Fannie and Freddie are basically being used as special purpose vehicles by our government to support the housing market. The private mortgage market is practically nonexistent; 96-97% of mortgages are flowing through Fannie and Freddie now. I think Fannie and Freddie are exercising a tremendous amount of power over the market by withholding properties from sale and not forcing foreclosure, the foreclosure process. I think that it would be best for the government just completely got out of the mortgage market and let the housing, because home prices are a function of income the leverage applied."

MICHAEL BURRY: THE HOUSING MARKET IS “ARTIFICIAL” – Pragmatic Capitalism

www.pragcap.com

 

[Bobby Bucks]

He made these remarks in 2010. They are even more true now, just with bigger numbers:
On the current housing market:
“It’s an artificial market. There are a tremendous number of homes where the home homeowner, I think it’s between 2.5 to 3 million homes, where the home homeowner are more than 9 months past due and are not giving notices that they are past due and they’re just living there for free. I actually know one that has been there for a few years without having to pay anything. I think that Fannie and Freddie are basically being used as special purpose vehicles by our government to support the housing market. The private mortgage market is practically nonexistent; 96-97% of mortgages are flowing through Fannie and Freddie now. I think Fannie and Freddie are exercising a tremendous amount of power over the market by withholding properties from sale and not forcing foreclosure, the foreclosure process. I think that it would be best for the government just completely got out of the mortgage market and let the housing, because home prices are a function of income the leverage applied."

MICHAEL BURRY: THE HOUSING MARKET IS “ARTIFICIAL” – Pragmatic Capitalism

www.pragcap.com

All very good points. NC Appraising posted this video last week that is on that subject, it's about an hour long, but well worth watching.

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[djd09]

More trouble for Fannie. Trust me, this will be massive when it's all said and over. Once the can of worms is open, it's over.

Indian American Congressman Suhas Subramanyam has launched an enquiry, on Wednesday, into last week’s mass firings of dozens of predominantly Indian American employees at Fannie Mae for claims of alleged unethical conduct and fraud; sending a letter to William Pulte, director of the federal housing finance agency, and Priscilla Almodovar, president and chief executive of Fannie Mae, demanding answers and evidence.


The Federal National Mortgage Association, commonly known as Fannie Mae, is a United States government-sponsored enterprise and a publicly traded company.

Last week, Fannie Mae had fired around 700 employees, including many Telugu-speaking Indian Americans, most of whom live in Northern Virginia. They have denied wrongdoing and have claimed Fannie Mae did not conduct any sort of investigation into the alleged behaviour, a press release from Congressman Subramanyam’s office said. The Indian Americans lost their jobs due to alleged ethical violations in connection with the misuse of corporate grant programmes, according to reports.

“It has been brought to my attention that Fannie Mae has accused hundreds of my constituents in the Indian-American community of fraudulent behaviour and fired them without conducting a full investigation or providing evidence,” said Congressman Subramanyam, who represents the state of Virginia’s 10th Congressional district. “I have spoken with many of these employees in our community, and they deserve due process. Fannie Mae owes them, Congress, and the American people an explanation immediately.”

It has been reported that these employees were fired over contributions to certain Indian American organisations through Fannie Mae’s matching gift programme. According to Fannie Mae’s website, this programme allows employees to “double the financial impact of their eligible donations through our matching gifts programme up to a maximum of $5,000 annually.” The groups that many employees donated to were approved by Fannie Mae for inclusion in its gift-matching programme.

In the letter, Congressman Subramanyam highlights the employees’ years of experience and exemplary performance reviews at Fannie Mae and notes that the individuals were fired without notice and are almost exclusively Indian Americans. Additionally, some of the employees who were fired have claimed that they have not even donated to the organisations in question.

The Congressman is concerned that Fannie Mae has not fully investigated the alleged fraudulent behaviour and that simply donating to Indian American organisations or belonging to the Indian American community may have been used as the sole rationale for firing these employees. In his letter, the Congressman demands answers from Fannie Mae on whether and how they had investigated this alleged fraud, if employees were given the opportunity to provide clarification or corrective action, if employees were provided evidence of specific violations they were alleged to have committed, if donations to specific charities were used as the basis for termination decisions, and, lastly, if any employees who donated to these organisations were cleared of wrongdoing as part of the investigations.

MSN

yes...sue them for discrimination

 

[djd09]

It's not illegal... even for appraisers.. unless you work in a State that has adopted USPAP as law. And that's true of any set of ethics... not illegal unless there is law that says it is. It's true that often there is overlap between ethics and law... but not always.

do not cheat, steal, or lie...the unethical stakeholders hate competition

 

[Trihard]

Pam Bondi asleep at the wheel.

 

[sputnam]

I do. I think many others do also but I don't know the exact number.

Me either. USPAP was adopted as law in NC.. but, that's not true for every state.

 

[sputnam]

Pam Bondi asleep at the wheel.

Unlikely. However, it is certainly true that she has a lot more to deal with than appraiser issues and making big changes takes time.