Chicago Tribune Article: Mortgage Cops
FHFA’s Office of the Inspector General (OIG) is going after Strategic Defaulters according to Chicago Tribune’s article and Realtor Magazines article.
Strategic Defaulter is someone who walked away from their mortgage and home even though they had the ability to pay, but chose to default because they were upside down on loan to value.
The Office of the Inspector General is a separate statutory agency within the FHFA that answers only to Congress. Its mission, in large part, is to root out fraud, waste and abuse within the FHFA. The agency has a staff of 130 investigators, auditors, attorneys and prosecutors that it describes as “extremely talented and seasoned.”
And because Fannie and Freddie are on the hook for the $187 billion in taxpayer money that the Treasury has invested so far to keep them afloat — by some estimates, the tab eventually could reach more than $360 billion — the OIG is on the prowl for people who owe it money.
Chicago Tribune Article
“We’re not just going to demand repayment,” says Heather Wolfe, OIG assistant inspector general for audits. “We’re going to lock [people] up.”
Bad Boys, Bad boys, whatcha gonna do. whatcha gonna do when they come for you. Although I have more of an image of Sergeant Joe Friday knocking on the door, “just the facts maam”.
I am not an attorney, but how would they prove that? It seems to me this could be a difficult case to make unless there was an egregious situation.
Hopefully this does not become a slippery slope. It makes me question whether or not I want a Fannie Mae or FHFA mortgage if they are also a police power – sounds kind of like borrowing money from the mob. (I am unclear from these articles if this is just an investigation unit or actual police power.)
Perhaps eliminating Fannie Mae might reduce fraud by letting the private banking system make loans based on risk analysis? Okay, now I am just talking Crazy…