“It is stunning that the conservator of Fannie Mae and Freddie Mac, which have received $150 billion in a taxpayer-funded bailout, had just two people receiving and processing customer complaints,” Representative Spencer Bachus, the Alabama Republican who is chairman of the House’s financial services committee, said in a statement. “Who knows how many reports of waste, fraud and abuse have gone unheeded and unaddressed?”
The federal agency overseeing Fannie Mae and Freddie Mac, the taxpayer-owned mortgage finance giants, failed to refer to criminal investigators and other authorities almost 100 complaints about possible foreclosure abuse and mortgage fraud at the companies over a recent two-year period, according to a report issued late Tuesday by the inspector general of the Federal Housing Finance Agency.
While the report did not determine whether these and other complaints had merit, it said that the agency’s unresponsiveness to them was problematic.
“Failure to recognize and quickly provide law enforcement authorities with information about allegations of fraud and other potential criminal conduct presents a significant risk for the agency,” the report said.
The inspector general’s report is the third to assess the agency that acts as conservator for Fannie and Freddie, which have cost the taxpayer roughly $154 billion since they nearly collapsed in September 2008.
The assessment covers the agency’s responses to complaints raised by consumers as well as current and former employees of Fannie and Freddie. It covers a period from July 30, 2008, when the finance agency was created, to Oct. 31, 2010, when the inspector general began its operations.
“Millions of Americans have been touched by the housing crisis,” Steve A. Linick, the inspector general, said in a statement. “Increasingly, they have filed complaints about fraud, waste or abuse, including allegations of improper foreclosures and possible criminal activity. Those complaints deserve timely and responsible action by F.H.F.A.”
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