Freddie Mac – which the government oversees after a bailout – received 34,000 serious fraud complaints over 14 months, but didn’t report or fix the problems, investigators find.
Mortgage giants like Freddie Mac got billions of dollars in a federal bailout, but when a taxpayer with a serious mortgage problem files a complaint — even an accusation of fraud — it isn’t resolved as quickly as regulations require — and no one’s being held accountable. Freddie Mac continues to ignore its customers when they lodge serious complaints about fraud or rule-breaking, leaving taxpayers potentially exposed to new threats, investigators warn. Between Oct. 2011 and Nov. 2012, Freddie Mac and its eight largest loan servicers received more than 34,000 serious complaints. Also called “escalated cases,” they cover customers who accuse Freddie Mac of fraud, lawsuits designed to intimidate home owners and other inappropriate conduct.
The company is supposed to report and respond to these problems. But investigators found a culture inside the mortgage giant and its partners that largely ignored customers, according to a report released Thursday. Freddie Mac’s four largest service providers – Bank of America, CitiMortgage, Provident and Wells Fargo Bank – never reported more than 20,000 escalated cases, roughly 60 percent of the total received. And almost a quarter of the total cases were not dealt with in the required 30-day window.
FHFA – has often been relying on Freddie Mac’s own reporting to ensure compliance with customer service, leaving government oversight severely lacking. “Servicers, Freddie Mac, and FHFA have not adequately fulfilled their respective roles relative to…addressing and resolving escalated consumer complaints in a timely and consistent manner,” The mortgage agency hasn’t taken any efforts to fix the problems, investigators said.
The government officials relied on Freddie Mac’s own reports and took them at face value. “FHFA’s failure to conduct independent testing of servicer compliance resulted in its reliance on incomplete data supplied by Freddie Mac.”
Source—washington guardian, phillip swarts