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Did mortgage giants ignore foreclosure abuse?

Tuesday, November, 8, 2011

A wide range of problems have caused this country's economic turmoil. But few factors have slowed the economy's recovery like the glut of foreclosed homes dotting the country. These foreclosures, especially prevalent in states such as Florida, California and Arizona, have pushed housing prices down, something that has stalled hopes for a stronger economic recovery.

Now comes the news, according to a story in the New York Times, that mortgage company Fannie Mae knew as early as 2003 that many of the law firms that had been hired to remove homeowners who had fallen behind on their mortgage payments were guilty of foreclosure abuses.

The fear is that some homeowners were evicted from their residences unfairly because of the negligent actions of these law firms.

The Times cited a report from the inspector general of the Federal Housing Finance Agency stating that this federal agency did little to monitor the actions of Fannie Mae and Freddie Mac after the federal government took over the companies in 2008.

One problem seems to be that Fannie Mae and Freddie Mac have retained law firms that were told to close foreclosures as quickly as possible. This desire for speed above all else may have caused law firms to skip out on some of the more time-consuming research involved in initiating foreclosure proceedings.

This is distressing news to homeowners who have lost their residences due to job loss, illness, injury or other setback. The thought that some of them may have been forced from their homes improperly must give many of these homeowners serious reason to doubt that their government has treated them well in these tough economic times.