Washington, DC – October 21, 2010 – (RealEstateRama) — U.S. Senator Olympia J. Snowe (R-Maine) is urging Fannie Mae and Freddie Mac to reinforce their commitment to safeguarding the legal rights of borrowers in view of recent allegations of defective and flawed foreclosure documentation at several of the nation’s largest mortgage lenders. Senator Snowe’s comments were made following today’s announcement by the Federal Housing Finance Agency (FHFA) that Fannie Mae and Freddie Mac, government sponsored enterprises placed into conservatorship of the FHFA in 2008 and currently financed by taxpayers, would need as much as an additional $215 billion over the next three years to meet their financial obligations.
“Before we even consider committing any additional taxpayer funds to enable Fannie Mae and Freddie Mac to meet their obligations, both enterprises should reinforce their commitment to safeguarding the legal rights of borrowers and protecting the integrity of the foreclosure process,” urged Senator Snowe. “I am deeply troubled by recent reports indicating that myriad foreclosures nationwide occurred in spite of defective and flawed documentation at several of the nation’s largest mortgage lenders and that many affidavits used in foreclosure proceedings may have been executed inappropriately and without proper notarization. These serious allegations potentially violate applicable law and Freddie Mac and Fannie Mae’s contractual servicing requirements, and must be addressed immediately to ensure the highest level of stewardship of taxpayer dollars.”
Since the companies were placed into conservatorship by the federal government in September of 2008, Fannie Mae and Freddie Mac have received $148 billion in taxpayer support, $13 billion of which has been returned to the government. Together, they control two-thirds of the nation’s $13 trillion mortgage market.
“With 2,369 foreclosures in Maine and 2,012,436 foreclosures across the nation at the end of September, it is critical that state foreclosure laws and Fannie Mae and Freddie Mac servicing guidelines are properly followed,” said Senator Snowe. “Both Fannie Mae and Freddie Mac play integral roles in our nation’s housing market and their stability is critical to the strength of our housing and financial markets as a whole. Taxpayers deserve no less than Fannie Mae and Freddie Mac’s best efforts to protect the integrity of mortgage financing and foreclosure processes, which will help reestablish confidence in our housing market and our overall financial system.”