MFI-Miami Accuses Fannie Mae Of Lack of Standing
Flint, MI – On August 28, 2012, MFI-Miami President Steve Dibert called on Fannie Mae to halt what he alleges is an illegal foreclosure and eviction of Flint Michigan School Teacher Amy Plumb.
On January 2, 2003, Ms. Plumb, a single parent with two teenage daughters refinanced her home with a local bank. According to the Genesee County Register of Deeds, on June 23, 2003, the mortgage was assigned to taxpayer bailed out lender, Citimortgage who also served as the servicer.
In 2010, Ms. Plumb contacted Citimortgage to request a loan modification and was led to believe she was being put into a government-sponsored HAMP loan modification program and began making modification payments. After several months, Citimortgage refused her payments. While Citimortgage assured Ms. Plumb they were not pursuing foreclosure of the property, attorneys for Citimortgage, Orlans Associates began foreclosure proceedings. Citimortgage told Ms. Plumb to ignore the letters from Orlans.
At the Sheriff’s Sale on March 11, 2011, Citimortgage’s attorney, Orlans Associates alleges that Citimortgage sold the mortgage to Fannie Mae. However, MFI-Miami discovered that there is no evidence of a transaction actually taking place.
Citimortgage argued that the GSE bought Ms. Plumb’s mortgage from them on a credit bid.
MFI-Miami President Steve Dibert explains, “If a lender or any other entity is claiming they are purchasing a mortgage at a Sheriff’s Sale with a “Credit Bid”, they are essentially admitting they already had an ownership interest.
This is backed up by MFI-Miami’s research that shows the GSE’s own procedures manual dictates an exchange of payment was not necessary because the GSE already had an unrecorded ownership interest in the mortgage.
Fannie Mae Announcement 8-12 from May 23, 2008, affirms the GSE’s policy that states Fannie Mae has an ownership interest prior to a Sheriff’s Sale:
Fannie Mae is at all times the owner of the mortgage note, whether the note is in Fannie Mae’s portfolio or whether owned as trustee, for example, as trustee for an MBS trust. In addition, Fannie Mae at all times has possession of and is the holder of the mortgage note, except in the limited circumstances expressly described below. Fannie Mae may have direct possession of the note or a custodian may have custody of the note. If Fannie Mae possesses the note through a document custodian, the document custodian has custody of the note for Fannie Mae’s exclusive use and benefit.
Steve Dibert questions the legality of the GSE’s actions, “If Fannie Mae had an ownership interest in Ms. Plumb’s mortgage, why is their interest not recorded on public record as required under Michigan law? The GSE is pulling the strings from the shadows makes a mockery of Michigan’s legislative process and undermines consumer confidence in the lending process.”