Industry News

Congress seeks answers on fraudulent real estate loans

Fannie Mae must forfeit $6.5 million

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Three U.S. lawmakers have asked Fannie Mae to explain dealings with a North Carolina firm that led a court to order the mortgage giant to forfeit $6.5 million. "We are very concerned that the U.S. taxpayers have been put at risk when certain loans were sold by First Beneficial Mortgage to Ginnie Mae after many of the same loans were determined to be fraudulent by executives at Fannie Mae," Republican Reps. Richard Baker, Sue Kelly and Robert Ney said in a letter to Fannie Mae CEO Franklin Raines. The three Representatives are chairpersons of subcommittees of the House Financial Services Committee. Ginnie Mae guarantees mortgage-backed securities composed of federally insured or guaranteed loans. A federal court ordered Fannie Mae to forfeit $6.5 million in funds determined to have come from fraudulent activities by First Beneficial Mortgage Corp. in North Carolina, according to news reports. First Beneficial obtained the funds to repay Fannie Mae by selling them to Ginnie Mae. I...