Yesterday, following announcements from Ally Financial and JP Morgan Chase of temporary suspensions of foreclosure efforts in certain states, Fannie Mae issued a statement yesterday expressing concerns about "reports of servicers failing to follow proper procedures in the administration of foreclosure cases," noting that "Fannie Mae servicers are required, by contract, to adhere to applicable laws and rules regarding mortgage documents, and to establish processes and controls that ensure compliance." A similar statement from Freddie Mac about "recent reports that there may be affidavits that were improperly executed in connection with foreclosures" emphasizes that "the alleged practices in these reports are clearly not in compliance with Freddie Mac's guidelines and directives to its servicers."
Edward J. DeMarco, the Acting Director of the Federal Housing Finance Agency (FHFA), which serves as conservator for both Fannie Mae and Freddie Mac, issued a separate statement responding to "recent accounts of deficiencies in foreclosure documentation by two large mortgage servicers," and expressed support for Fannie Mae and Freddie Mac's "efforts to remind servicers and other parties engaged in processing foreclosures to do so in accordance with their seller-servicer agreements and applicable laws and regulations." He stated that "FHFA has directed the Enterprises to work collectively to develop and implement a consistent approach to address any problems" and that "FHFA is coordinating with appropriate regulators on this issue."
Separately, Bank of America has reportedly announced a temporary suspension of foreclosures in 23 states to reexamine its internal processes, and Connecticut's Attorney General, Richard Blumenthal, characterizing " the actions of GMAC/Ally and JP Morgan [as] inexcusable," announced on Friday that he has "asked the state Judicial Department to freeze all home foreclosures for 60 days because of defective document filings and institute measures to assure the integrity of future filings."