Story out in the New York Times: A Mortgage Tornado Warning, Unheeded
http://www.nytimes.com/...
YEARS before the housing bust — before all those home loans turned sour and millions of Americans faced foreclosure — a wealthy businessman in Florida set out to blow the whistle on the mortgage game.
His name is Nye Lavalle, and he first came to attention not in finance but in sports and advertising. He turned heads in marketing circles by correctly predicting that Nascar and figure skating would draw huge followings in the 1990s.
But after losing a family home to foreclosure, under what he thought were fishy circumstances, Mr. Lavalle, founder of a consulting firm called the Sports Marketing Group, began a new life as a mortgage sleuth. In 2003, when home prices were flying high, he compiled a dossier of improprieties on one of the giants of the business, Fannie Mae.
In hindsight, what he found looks like a blueprint of today’s foreclosure crisis. Even then, Mr. Lavalle discovered, some loan-servicing companies that worked for Fannie Mae routinely filed false foreclosure documents, not unlike the fraudulent paperwork that has since made “robo-signing” a household term. Even then, he found, the nation’s electronic mortgage registry was playing fast and loose with the law — something that courts have belatedly recognized, too.
You might wonder why Mr. Lavalle didn’t speak up. But he did.
and now Fannie and Freddie execs, present and past, including one who is under indictment for the failure to disclose the fraud, are scurrying like the bugs you might find when you peel up an old tattered rug.
MERS, whose business model has been trashed by judges across this country, still insists that they have a workable model, although they are banned from instituting foreclosures in their company name anymore. They were doing it way back 6 and 7 years ago, with 100% success. Those foreclosures, long settled, might not be so settled any more.
Mr. Lavelle's work, submitted to Fannie and Freddie to make them aware of the fraud and abuses he found in his study, resulted in a report, labeled O.C.J. Case No. 5595, but it was buried with little action. The report did make an effort to dispute some of Mr. Lavelle's claims, but those that have seen it, including now the NY Times, indicate the report does little, as does the historical record of fraud since then, to dispute any of it.
Here's the report generated by Mr. Lavalle, go read and weep:
http://www.nytimes.com/...
