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Federal Regulators Investigate Alleged Kickbacks at Fannie Mae

Image: Federal Regulators Investigate Alleged Kickbacks at Fannie Mae

By    |   Tuesday, 28 May 2013 12:51 PM

Federal investigators are looking into allegations that mortgage foreclosure specialists at Fannie Mae were taking kickbacks in exchange for steering foreclosure listings to brokers.

According to The Los Angeles Times, Armando Granillo, an employee at Fannie Mae's Irvine office, told a broker in a wiretapped conversation that kickbacks were "a natural part of business" and said other workers in his office were "engaged in similar conduct."

Investigators allege Granillo was selecting brokers to handle foreclosure listings in exchange for 20 percent of the brokers' commissions. The authorities are also examining whether other workers in the Irvine office were doing the same, which was also alleged by one former whistleblower.

Fannie Mae received a $166 billion in taxpayer bailout money in 2008 after it buckled under the weight of mass defaults on the home loans it had guaranteed. The mortgage giant, which remains under government control, has since been faced with shifting hundreds of thousands of repossessed properties.

The Consumer Financial Protection Bureau is one of the federal regulatory bodies that has moved to shut down kickback operations, according to the LA Times.

"The CFPB will continue to take action against schemes designed to let service providers profit through unscrupulous and illegal business practices," CFPB Director Richard Cordray said earlier this month when announcing a settlement with a homebuilder accused of a kickback scheme.

The consumer bureau also fined four mortgage insurers $15.4 million last month over alleged kickbacks, the Times reported.

A Fannie Mae spokesperson declined to comment on the investigation in Irvine but said in a statement, "While wrongdoing by Fannie Mae's [foreclosure] employees is rare, we take all allegations seriously."

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Federal investigators are looking into allegations that mortgage foreclosure specialists at Fannie Mae were taking kickbacks in exchange for steering foreclosure listings to brokers.
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2013-51-28
Tuesday, 28 May 2013 12:51 PM
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