GSE Bill would allow Homeowners to submit FOIAs to Fannie and Freddie while under Federal Conservatorship

By K.K. MacKinstry/LendingLies

Anyone who is trying to find out information about the trust ownership of their loan, knows that if Fannie Mae or Freddie Mac are involved- your research hits a stone wall.  Homeowners who have a mortgage not secured by the GSEs are better able to determine what trust their loan was allegedly assigned to.  The GSEs who operate as quasi-governmental agencies are still private companies but have been able to evade public disclosures by claiming to not be federal entities.

Under current law, the Freedom of Information Act does not apply to Fannie Mae and Freddie Mac because, while they are under federal conservatorship, they are not federal agencies.

The days of the GSEs hiding behind an ambiguous status may come to an end.   H.R. 1694 was introduced by Rep. Jason Chaffetz R-UT last week.     Under the proposed  bill, the GSEs would be required to accept and process FOIA requests from the public and release information to satisfy those request for as long as they remain under federal conservatorship.  This would allow homeowners in litigation and foreclosure to have access to trust information and other loan information.  You can be assured that the GSEs and private investors will fight all attempts to bring transparency to these opaque entities.

On March 28, 2017, the House Committee on Oversight and Government Reform requested a cost estimate from the Congressional Budget Office. The CBO estimated the bill would increase spending for Fannie, Freddie and the Federal Housing Finance Agency by $10 million over the 2018 to 2027 period. Revenues, however, would not be affected.

All the net costs would be covered by Fannie and Freddie because FHFA would assess the fees on the two entities to cover its costs.  Both Fannie and Freddie are profitable operations and the government has fought to relinquish federal conservatorship.  However, it can be predicted that Fannie and Freddie will attempt to revert back to publicly held companies rather than hide the fact that a majority of the loans it guarantees were never properly delivered to the trusts.

The increase in administrative costs wasn’t the only increase the Congressional Budget Office discovered. The office estimates that administrative costs would increase by $40 million in 2018 in order to research and administer FOIA requests.

This bill would only apply to the GSEs while they are under federal conservatorship, and the administration could have solidified plans for GSE reform. The Mortgage Bankers Association recently released its GSE reform suggestions that analyze suggestions for the best option for reform.  Therefore, if this legislation is passed we highly suggest that readers immediately send FOIA requests immediately by certified mail to obtain the name of the trust that allegedly holds your mortgage.

Steve Mnuchin, has already stated that GSE reform is a priority of this administration.  The MBA’s “Task Force for a Future Secondary Mortgage Market,” was created by big lenders and insurers in the industry, to offer a specific vision of the end-state of the GSEs, as well as transition steps to a post-GSE system.  Predictably,  the White Paper benefits the banks at the expense of the homeowner.

The paper breaks down specific areas for reform. It includes:

  • Maintain the liquidity and stability of the primary and secondary mortgage markets through the establishment of a resilient and robust housing finance system, throughout the transition process to the end state.
  • Replace the implied government guarantee of Fannie Mae and Freddie Mac with an explicit guarantee at the mortgage-backed security (MBS) level only, supported by a federal insurance fund with “appropriately” priced premiums (whatever that means).
  • “Protect” taxpayers by putting more private capital at risk through expanded front- and back-end “credit enhancements” (requiring that the government and tax payer pay for the guarantee).

The chart below is a snapshot from the white paper and gives a quick view of keys factors in the MBA’s GSE reform plans, comparing how the GSEs operated before and after conservatorship.

The paper emphasizes the need for affordable-housing as a political requirement for bipartisan GSE reform.  But in reality, the paper emphasizes the ability of the big lenders to step in for the GSEs and monopolize the profits, while having the federal government act as a guarantor only.

History demonstrates that big banks don’t do anything altruistic for homeowners and the plan would require a mandatory housing fee charged against the guarantors.  Therefore, the banks would receive all of the financial benefits while saddling the government and homeowner with the risk and expense.  It sounds like the type of plan the big banks would attempt to push on to an unsuspecting public.

It is likely that e-lending and e-documents would become the new standard so that the big banks can attempt to electronically manipulate a decade of defective loan documents through this system.  This is disguised under the “preserve infrastructure” clause.  The government and big banks have proven they are unable to administer responsible housing policies without resorting to fraud or protecting homeowners.

Homeowners and borrowers should vehemently oppose using big lenders that securitize loans or use e-signature loan products that can easily be manipulated and fabricated.  Do yourself a favor and bypass the big banks.  Credit unions, local banks and lenders that offer portfolio loans are an excellent alternative to having your loan backed by Fannie Mae or Freddie Mac.



11 Responses

  1. Farm Credit Administraion’s Associations also!

  2. BTW – Support “Stop the GSE Sweeps” – Encourage Congress to privatize the GSEs. It is said the quarterly Sweeps have been used to underwrite Obamacare. The Sweep money comes from foreclosures – the servicers have Fannie or Freddie or one of their affilliated flippers in the background. This has to stop! It wasn’t what these government sponsored enterprises were designed to do.

    Obamacare has to go to stop the rampant pace of foreclosures. It was said President Trump had planned to stop the March 31st Sweep in order to get GSEs healthy enough to be sold, but the healthcare bill didn’t pass. Politics!

  3. If you haven’t read the 2011 SEC F/F Complaint and Non-prosecution Agreements (NPA) – do it. READ – THE HERA ACT.

    When you read the 2012 DOJ v. BofA Complaints (3 plus an Intervenor Complaint) – many documents still remained sealed (which need to be pushed into public):

    It becomes clear F/F were complicit – at the helm of the overall subprime frauds. Fannie instituted the EA and CW, who (next to New Century) was the largest supplier of loans, instituted “Hustle” – the EA under different name.

    EVERYTHING went through THE GSEs – VERY LITTLE MISSED THEM. And after the bailout the banks turned over the “toxic assets” and the Treasury dumped them on Fannie who became the “financial agent for the United States of America” and wrote Participation contracts with nearly every servicer and/or their parent operations.

    Either FANNIE (most likely) or FREDDIE ARE THE REAL PARTY IN INTEREST. Intentionally CONCEALED for the most part. Usurping state and federal laws. Fraud by Omission.

    There are about 7 agency actions against every bank and servicer that culminated during the 2016 President campaign which (likely intentional) that covered up what little press these orders, judgments and settlements with admissions held.

    Time has come to load the paperwork into the exhibits. We know we have to appeal to get justice – don’t waste time – get it all in the file.

    Statute of limitations is running. Figure out how to get the masses organized and what types of lawsuits might get the most value in the quickest amount of time.

  4. But, to add — the toxic securities were purchased from banks via a government trust, and sold to distressed debt buyer via a Public Private Investment Partnership. So the Legacy securities (supposed loans) – who knows where they are. Original source, however, was not the banks. .
    Trustee for whom and to what default security?? . Before borrower ever even missed a payment, a default security existed.

  5. Mr. Cox — excellent post.

  6. Fannie Mae and Fredrick Mac


  7. The Title Insurance is ACTING as YOUR Attorney
    Its Like Beating Yourself Up …

    State Your Claim, Can You See Me Now?
    … File It? Record It? With Whom?

    Last American Title

  8. Through TARP, Fannie Mae/Freddie Mac/Ginnie Mae has “purchased” everything and is always considered the “owner” of the “note.” Fannie is an admitted agent of the government. The so-called “lenders” or “banks” are sub-agents of Fannie (et al.); the servicers, sub-agents of the sub-agent banksters. Therefore, aside from it being impossible to get the government as the principal to admit being the real party in interest (in privity with the others); unless you can file a FOIA (which I understand is being legislated now) you will NEVER find who really “owns” your purported “loan” … they will not let you (no full discovery ever enforced in a case in the U.S. I’m aware of). The funds from foreclosure profits are funneled to the Treasury and used to fund whatever they want from Obamacare to the military “industrial complex.”

    See, e.g.: (Fannie Mae admitting to be agent of the government); and

    To see some of the agreements that show created instruments and so forth perpetrating the fraud.

    Also see who in the “government” are MERS members including, inter alia, the IRS who as the bill collector, could easily shut down these phony REMIC trusts claiming “ownership” of these “loans” which is again, bogus. I have yet to see in one case where the purported REMIC was actually listed with the IRS as such (as named in the assignment(s)) which means they have either not elected REMIC status as required by the bogus PSAs (all of which are securities violations but I digress…) subjecting these criminals to 100% tax liability if only the IRS would enforce it….even one prosecution would change the landscape for these fraudulent foreclosures and no doubt eliminate the so-called “national debt” coincidently just about the amount of all mortgages in the entire country (which is about the amount the banksters were bailed of).

    It is therefore impossible to beat them because we are fighting ultimately the government itself and the corrupt “three branches” thereof including (especially) the judiciary. Where are you gonna’ go when the authority you have to go for relief is complicit.

    One man’s opinion FWIW having researched and been involved with these litigated cases for over 10 years now and some of these issues just coming to light now after all this time.

  9. This could be very helpful. I’ve been given the runaround by both Fannie and Freddie on two different houses. Yet they both seem to use the same false narratives.

  10. If this bill passes, homeowners should use the FOIA to determine not only if Freddie/Fannie currently owns the loan, but also if they ever owned the loan, and, if so, how was it recorded (closed or paid) at that time at Freddie/Fannie. Also, need to ask if any Freddie/Fannie REMIC trust was an investor in the private trust that may claim to currently, and in in the past, own the loan. This bill is very important. Hope it passes. .

  11. Reblogged this on Deadly Clear and commented:
    Awesome! Sad thing is Fannie extinguishes files upon a “credit event.” We’ll need a PRESERVATION ORDER.

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