Yesterday, February 6, was the supposed deadline for attorneys general to sign a foreclosure fraud scandal settlement with US banks which broke in 2010. New York Attorney General Eric Schneidermann and California Attorney General Kamala Harris among others are hesitant to settle knowing the extent of foreclosure abuses. It has been reported that government-backed mortgage giant Fannie Mae knew about foreclosure fraud as far back as 2003, but did nothing about it.
State attorneys general planned to settle over foreclosure practices with big banks. (photo: AP)
07 February 12
oday is the supposed deadline for a group of attorneys general to sign onto a settlement with the nation's biggest banks, stemming from the foreclosure fraud scandal that broke back in 2010. The settlement has been in limbo for several months, as a group of AGs believed it gave too much up to the banks in terms of immunity for mortgage misdeeds.
Part of the hesitation on the part of AG's such as New York Attorney General Eric Schneidermann and California Attorney General Kamala Harris is that the settlement would have shortchanged investigations into the true extent of foreclosure abuses, which have reportedly gone back decades. In fact, according to a report in the New York Times over the weekend, government-backed mortgage giant Fannie Mae knew about foreclosure fraud as far back as 2003, but did nothing about it:
Even then, [Florida businessman Nye Lavalle] discovered, some loan-servicing companies that worked for Fannie Mae routinely filed false foreclosure documents, not unlike the fraudulent paperwork that has since made "robo-signing" a household term. Even then, he found, the nation's electronic mortgage registry was playing fast and loose with the law — something that courts have belatedly recognized, too…For two years, he corresponded with Fannie executives and lawyers. Fannie later hired a Washington law firm to investigate his claims. In May 2006, that firm, using some of Mr. Lavalle's research, issued a confidential, 147-page report corroborating many of his findings.
And there, apparently, is where it ended. There is little evidence that Fannie Mae's management or board ever took serious action.
Schneidermann has sued Bank of America, JP Morgan Chase, and Wells Fargo for their use of a mortgage database that may have led to improper foreclosures. And evidently a look into what Fannie Mae knew about foreclosure fraud is also warranted.
