Freddie Mac deja vu?
Among Freddie Mac's four largest mortgage “servicers” that handled about 20,000 complaints over a 14-month period, not one reported a single case of fraud or regulatory violation, according to a new audit.
Yep, everything's hunky-dory, based on the supposed due diligence by mortgage servicers Bank of America Corp., CitiMortgage, Provident and Wells Fargo & Co. Not that any of this is unusual.
Based on the audit by the Federal Housing Finance Agency's inspector general, 98 percent of Freddie Mac's mortgage servicers that collect payments and deal with borrowers reported no so-called “escalated” cases. We're talking about a mortgage giant, propped up by taxpayers, that guarantees more than 10.6 million residential mortgages worth an estimated $1.6 trillion.
“Mortgage servicers, Freddie Mac and the FHFA have not adequately fulfilled their respective responsibilities,” according to the audit reported by the Los Angeles Times.
In effect, these so-called mortgage managers, supposedly Freddie Mac's ground troops in dealing with borrowers, aren't complying with basic reporting requirements, according to the IG. And given this level of “oversight,” we return to a frighteningly familiar question: Are today's mortgages worth the paper on which they're written?
Such lackadaisical regard is more reason to break up mortgage monstrosity Freddie Mac and its equally ugly sister, Fannie Mae.