WASHINGTON — Mortgage giant Fannie Mae knew about allegations of improper foreclosure practices by law firms in 2003 but did not act to stop them, a government watchdog says.
Similar allegations are the subject of a probe by state attorneys general into how lenders and law firms ignored proper procedures to handle a crush of foreclosure paperwork.
An unnamed shareholder warned Fannie Mae of alleged foreclosure abuses in 2003, the inspector general for the agency that regulates Fannie says in a report being released today.
Fannie Mae responded by hiring a law firm to look at the claims in 2005. The law firm reported in 2006 that it had found Florida foreclosure attorneys “routinely filing false pleadings and affidavits.”
Fannie officials said they told a government official about the findings in 2006. That unnamed official, who now works for Fannie’s regulator, the Federal Housing Finance Agency, indicated that he couldn’t recall the conversation, the report says.
