Mortgage mess: Free Press uncovers widespread foreclosure dumping by Freddie/Fannie
The Detroit Free Press is two-thirds through a three-part series about federal mortgage underwriters Fannie Mae and Freddie Mac leading an industry-wide effort to dump metro Detroit foreclosures for pennies on the dollar.
August 15, Detroit Free Press: In February and March, 34 Fannie and Freddie properties in Southfield were sold by the mortgage giants for 55% of their market value, on average, property records show.
In Farmington and Farmington Hills, 30 homes sold at 66% of their market value.
And 75 Fannie and Freddie homes in Warren sold for an average of 45% of their market value.
The Freep also quotes local officials like Oakland County Deputy Executive Bob Daddow, a Republican, and Oakland Country Treasurer Andy Meisner, a Democrat, calling the mortgage dumps “a travesty” and “unconscionable.”
In a follow-up report in the Michigan Messenger, mortgage fraud investigator Steve Dibert actually goes a step further. Dibert says the documents uncovered by the Free Press reports suggest the foreclosures were improperly handled, and therefore, possibly illegal.
August 15, Michigan Messenger: The documents also may impact all foreclosures. Dibert notes that those documents appear to indicate an ownership of the mortgages.
“If Fannie Mae is claiming ownership of these mortgage at the time of the foreclosure then why is ownership being assigned to the the servicer (usually through MERS) prior to the sheriff’s sale?” Dibert said. “Under Michigan law, if the servicer forecloses they must disclose who the owner of the note is.”
The result of this, Dibert has noted in the past, could be the elimination of thousands of foreclosures because the law was not followed properly.
The entire mess underscores what still hasn’t been acknowledged about the ongoing mortgage crisis and the near-collapse of the financial markets that it caused: It’s impossible to ignore market fundamentals over the long-run.