Grayson Sends Letter To Fannie CEO Demanding Explanation To Company's Actions Vis-A-Vis Pervasive Mortgage Fraud

Tyler Durden's picture

Alan "Taz" Grayson is back again, and asks some very relevant questions of Fannie's CEO Michael Williams:"Why is Fannie Mae using lawyers that are accused of regularly engaging
in fraud to kick people out of their homes?  Given that Fannie Mae is at
this point a government entity, and it is the policy of the government
that foreclosures are a costly situation best avoided if there are any
lower cost alternatives, what steps is Fannie Mae taking to avoid the
use of foreclosure mills?  What additional steps is Fannie Mae going to
take to ensure that foreclosures are done only when necessary and only
in accordance with recognized law?  How do your servicer guidelines take
into account the incentives for fraud in the fee structure of
foreclosure attorneys and others engage in the foreclosure process? 
What mechanisms do you employ to monitor legal outsourcing?" He almost asks the correct one: "Is Fannie (and Freddie) a shell operation to willfully and illegally transfer non-existent deeds to servicer banks so they can collect subsequent cash flows associated with misappropriated properties, while receiving tens of billions in taxpayer funding each and every quarter."

Full Grayson letter

September 24, 2010

Michael J. Williams
President and Chief Executive Officer
Fannie Mae
3900 Wisconsin Avenue, N.W.
Washington, D.C. 20016
Dear Mr. Williams,
We are disturbed by the increasing reports of predatory 'foreclosure mills' in Florida working for Fannie Mae servicers.  Foreclosure mills are law firms representing lenders that specialize in speeding up the foreclosure process, often without regard to process, substance, or legal propriety.  According to the New York Times, four of these mills are both among the busiest of the firms and are under investigation by the Attorney General of Florida for fraud.  The firms have been accused of fabricating or backdating documents, as well as lying to conceal the true owner of a note.
Several of the busiest of these mills show up as members of Fannie Mae's Retained Attorney Network, a set of legal contractors on whom Fannie relies to represent its interests as a note-holder.  The network also serves as a pool of legal talent that represents Fannie in its pre-filing mediation program, a program designed to facilitate communication between borrowers and servicers prior to foreclosure. In other words, Fannie Mae seems to specifically delegate its foreclosure avoidance obligations out to lawyers who specialize in kicking people out of their homes.
The legal pressure to foreclose at all costs is leading to a situation where servicers are foreclosing on properties on which they do not even own the note.  This practice is blessed by a legal system overwhelmed with foreclosure cases and unable to sort out murky legal details, and a set of law firms who mass produce filings to move foreclosures as quickly as possible.  At the very least, we would encourage you to remove foreclosure mills under investigation for document fraud from the Fannie Mae's Retained Attorney Network. We also believe that Fannie should have guidelines allowing servicers to proceed on a foreclosure only when its legal entitlement to foreclose is clearly documented.  In addition, these charges raise a number of questions for us about the foreclosure process as it pertains to Fannie Mae's holdings.
Why is Fannie Mae using lawyers that are accused of regularly engaging in fraud to kick people out of their homes?  Given that Fannie Mae is at this point a government entity, and it is the policy of the government that foreclosures are a costly situation best avoided if there are any lower cost alternatives, what steps is Fannie Mae taking to avoid the use of foreclosure mills?  What additional steps is Fannie Mae going to take to ensure that foreclosures are done only when necessary and only in accordance with recognized law?  How do your servicer guidelines take into account the incentives for fraud in the fee structure of foreclosure attorneys and others engage in the foreclosure process?  What mechanisms do you employ to monitor legal outsourcing?
We look forward to your responses and to understanding more about these disturbing dynamics in future hearings.

Alan Grayson                       Barney Frank                        Corrine Brown
Member of Congress            Member of Congress            Member of Congress

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Turd Ferguson's picture

I'm glad this prick, Grayson, is pursuing this. However, he is such an unbelievable, douchebag, prick, partisan democrat he make me want to puke.

We will never, ever extricate ourselves from this mess if we keep electing assholes like Grayson.

spekulatn's picture

Well said Turd.

Flush 'em all.

-Michelle-'s picture

Agreed. Also, I'm not usually a grammar stickler, but is it too much to ask that our elected officials use a simple check on official correspondence?

"What steps are..."

libert's picture

Uhh..."steps" is the object of those sentences. The subject is "Fannie Mae," and the verb is "taking," so the singular form "is" is correct. I.e. "Fannie Mae is taking what steps?" The steps aren't taking anything.

Cognitive Dissonance's picture

Mom, is that you? You promised me you would stay on Glenn Beck's web site. :>)

hbjork1's picture


You see we do have people in the US that a conversant with the English language.

Cognitive Dissonance's picture


I occasionally ask my very old and still sharp as a tack mother to proof read some of my articles. In a word, she's brutal. Thank God she works cheap, usually for twice a month Sunday lunch at her favorite restaurant and twice weekly phone calls, because I would never pay for her abuse. :>)

My biggest mistake was printing out the first article for proof reading in large font. This just gave her more room to fill in with snide comments and corrections. With a red pen no less. Last week on the way to the restaurant she wanted me to stop at Staples. She had me go in and purchase more red pens. She laughed her head off at my misery.

Careless Whisper's picture


that's right they aren't taking any steps. the lawyers in the florida case were hired for the mortgage note holder, fannie, and the lawyers recorded a fraudulent mortgage assignment to the benefit of j p morgan chase. you would think, at a minimum, that fannie would dismiss those lawyers, excpet maybe they were in on it too, and its another back door bailout (robbery). what happened to all the money collected by the banks from those fraudulent foreclosure notes? did they keep the loot or turn it over to fannie?

Bob's picture

Those are the burning questions.  Something tells me that Grayson already has a pretty damn good idea of the answers . . . he is well connected, after all, and it seems unlikely that he'd risk making a fool of himself with these kind of allegations otherwise.  We'll see.

Commander Cody's picture

The Great Wealth Transfer has many conduits.

-Michelle-'s picture

Hmmm. I would think the phrasing determines the usage.  "Fannie Mae is taking steps."  "Steps are being taken by Fannie Mae."  I'm just being nitpicky, though.

Bob's picture

Fact is that he is the ONLY one taking them to task, including every other sacred cow of the various partisan crowds, even the Great Mr. Paul.

How about some credit where credit is due?  If he's the only prick willing to do this, it would appear that this prick is the best of class at this point.

Turd Ferguson's picture

If you don't believe everything he believes, you are "the enemy". Says it himself in this clip.

What's next, Congressman? Re-education camps for anyone who disagrees?

Bob's picture

Charming.  I missed the part about the "re-education camps."  He's honestly calling it as he sees it, however.  You don't think many others would say the same about their "opponents" if they had both the honesty and the balls? 

He's obviously no diplomat.  One thing that is perfectly clear every time you hear him is that he shoots--metaphorically, don't duck--from the hip. 

There's  a weapon for every battle--he would seem to be perfectly suited to this one.  He doesn't give a fuck what anybody thinks. 

I surely don't agree with everything he says, nor even believe that he should have said what he does in that 1 minute video clip, but I do think that he's proceeding the way somebody needs to on this issue.  And nobody else is doing it. 

It takes a prick sometimes--and I hope he stays the course on this. 

Don't you?

MayIMommaDogFace2theBananaPatch's picture

He doesn't give a fuck what anybody thinks. 

Dear God, I hope he doesn't have a hottub.

Turd Ferguson's picture

" I missed the part about the "re-education camps." 

Well no shit, Bob. I was inferring the next step in his line of reasoning.

It does not take a village nor a prick. Just because someone disagrees with you politically does not make them "the enemy" and an "enemy of the country". If you truly cannot see the disastrous implications of political leaders using this type of language, then you have efficiently buried your head so deeply in the sand of partisanship that you will never be any help in digging our country out of the mess CREATED BY BOTH SIDES. 

Bob's picture

We've gone way beyond the point where I'm gonna worry about the civility of public discourse.  Or, further examining the comments here, spell checks, facial hair, and party identification. 

What I see is a whole lotta misguided distraction from the single relevant issue: Is this guy doing the right thing here?

The rest is fud, in my judgement.  It has nothing to do with partisonship in my book. 

Turd Ferguson's picture

Point taken but you can do the right thing without being an asshole the rest of the time. Whatever happened to "taking the high road"?

Again, enflaming your supporters and your opponents by naming your opponents as "enemies of the state" does nothing to help us out of this mess. Grayson is one prick we could do without in Congress.

Bob's picture

Turd, I have no argument with your vision of the high road, but this country is completely off the tracks at this point. 

What I see in Grayson, on this all-important issue, is a guy who is trying to get the job done.  Hey, when that's taken care of, send him to charm school.  Bounce him out of congress for all I care. 

But if this opportunity to set things right with the banksters and the government is not pursued fully, I don't see much chance for anything left of this country worth worrying about. 

Don't worry, I'll fight right alongside you if "re-education camps" ever get put on the table.  

Turd Ferguson's picture

You got it, bro.

Captain Bob and Sgt Major Turd reporting for duty.

Have a great weekend!

nmewn's picture


Alan Grayson. While I admire his pugnacity...things are not black & white with Mr.Grayson

With Grayson we are asked to believe that a Harvard educated lawyer, whose specialty was contract law (with Fried, Frank, Harris, Shriver & Jacobson) was the victim of a ponzi scheme, in which he says he willfully allocated 29 million dollars worth of IDT stock into offshore accounts. He claims this loss to the IRS as his largest "asset".

This guy doesn't pass the smell test for me, on a host of levels.

Just sayin.



apberusdisvet's picture

No question; he's an asshole; but I'll cut him some slack on this issue; the MSM don't understand this fraud; most of the articles I've read totally miss the point.  It's a title issue you dumb fuck journalists;  neither banks or any new owner of foreclosed or short-saled property can be secure in their ownership.

hbjork1's picture


" What's next, Congressman? Re-education camps for anyone who disagrees?"

TF, how about some "education camps".  They can't be "re-educated" if they were never educated in the first place. 


Cognitive Dissonance's picture

We will never, ever extricate ourselves from this mess if we keep electing assholes like Grayson.

May I suggest we well never, ever extricate ourselves from this mess as long as we keep this "election" system, along with other key social control systems such as the "rule of law" that is hardly fair and equal.

Of course, that would require that "we" do something about it. However, as long as we can plead and pray that the sociopaths will come to their senses and play nicely, we don't need to lift a finger. The reality is that the system is self regulating (meaning the peons [that's you and me] are regulated using the "rule of law") and self perpetuating, as long as you're in the right minority.

Turd Ferguson's picture

I hear ya, CD. 

It may be simple and unsophisticated but term limits may be the only way out.

President: 1 6-yr term

Senate: 1 6-yr term

House: 3 2-yr terms

SRV - ES339's picture

All improvements Turd, but they do not address the root cause... financial influence. The beast that must be destroyed.

MachoMan's picture

I'm thinking there are quite a few things that might help:

1.  Random appointment of governmental positions, similar to jury duty.  We have american idol style appointment striking for presidential elections...  last man standing wins.

2.  States adopt their own similar system of random appointment.

3.  Only warm bodies may contribute to campaigns, and only in a de minimis amount, max ~$100 per candidate. 

4.  All debates/speeches/etc. are broadcast for free on the internet and other television stations and all candidates remaining get to speak in equal lengths.  Questions are unknown ahead of time. 

5.  Limit advertising expenses per candidate to incredibly meager amounts and only allow advertising to state platform and sworn facts of personal background.  The goal is to be uniform and limit the possibility of manipulation.

6.  Any amounts obtained through taxation that do not get used go into a campaign fund for subsequent candidates...  dollar thresholds can be increased depending on the amount in the fund.  Any amount existing in the fund at the beginning of a campaign can be implemented in a way similar to regressive credit/wellfare, with ceilings on the amount contributed to a candidate.

crosey's picture

Back in the day, serving in the federal government was a royal pain in the ass.  You had to leave your home and business, uneasy travel, bickering when you get there, then a long trip home to see what state your life and business was in.  The historical record is replete with such stories from our founding fathers.  Even Jefferson hated it.

Now, it's a gravy train.  If you want to stop the train, end the gravy.  And that goes for the thousands of overpaid government staffers who are living off the languishing taxpayer tit.

jmc8888's picture

Term limits would make things worse.

So instead of holding people to account, we just file them in and out.

You see, bad politicians are term limited to 1-2 terms usually anyways, but good ones can last a long, long time.  Of course we don't see many of these, but it can take only 1 person to change things.

If that person was term limited, looks like we're screwed.

FDR had ~3 1/4 terms.  Had he had 2, or 1 6-year, do you think we would have won wwII?

Well you'd be wrong. Because it was ONLY FDR that kept us building up into a war.  ALl the wall street/ QUeen of englanders wanted us to stop SPENDING. 

Only someone who'd been around the block, was able to get us through WWII.

Since LIFE term limited him, what happened?  Well just like TERM LIMITS, we got another president, except Truman was a dumbass, lying, corporate wall street monetarist whore.

Had FDR lived a couple more years to finish out that 4th term, we would not have gone down this road.  No vietnam, No military/industrial complex, no monetarist bs, because FDR was going to CRUSH them.

But a new guy, like with term limits, or a death, altered things.

So let's just all be idiots and want to try to use a SOPHISTRIC NOTHING to make a bs case that we'd be better off with term limits by constantly having rooks in there.  Easily controlled rooks.

Yeah, like we aren't corrupted enough.  Just imagine if EVERYONE was new, but the lobbyists were 10 termers.  Get it?  Probably not.


You see if you have a problem with who is elected, do what's necessary to wake the people up so that they make better decisions.

Only idiot thinking would point to term limits. Because term limits don't solve anything.  They WOULD get rid of people we don't want to get rid of. 

Is this America?  Term limits, in the country that defines democratic republics, purely founded on our ability to believe we can control our outcome through our elections, is akin to the Queen wanting to ditch her monetary system, for our AMerican credity system. 

So, how many people will be elected that are better because of term limits.  How many will THAT decision bring in?  ANyone? Beuller..Beuller....Frye...

0...that's how many good people will be added to the system by this meausre

Now how many would be taken away?  ALL INCUMBENTS WORTH THEIR SALT after the time is up. 

When we right this ship to get out of this mess, don't we want those people in there, because they'll know what the hell they're doing?

Just because I'm 32, doesn't mean I don't understad and respect the wisdom of sane minded seniors.  Too bad term limits would pretty much guarantee we'll be missing that.

If you are anti-american in spirit, be for term-limits.  Because term-limits by their very nature are antithetical to our U.S. system.

The key is choosing WISER, not more OFTEN.

Meanwhile just because you have to recycle the candidates more often, doesn't mean you'll get quality.  But you damn sure will be throwing out the good ones every election in perpetuity.

How many football teams would be good if you got rid of all players that had played longer than 4 years?

We call that the NFL.  You'd call them, trash. 

But you see, they're term limited in college.  But we have somewhere they can go afterwards, the NFL.  Where the REAL game begins.

So we can have an WNBA level of quality in our congress with term limits, or the actual chance to be at an NBA level without term limits. 

Past is not the future.  Once this is over, and with our tech, no monetarist will ever be able to run the game again. 

But, since we're not there yet, just imagine a bunch of rooks going against all the top lobbyists who not only schooled the last congressman who sat in the rooks seat, but the 5 before that.

In other words, none of them will have a chance to become the type of leader we need, through experience.  SO guess what we won't get.  Leaders we need.

But we'll have a revolving door so the people can feel better because they can't remember who is their congressman because it changes every election or two.  They don't even keep up with their congressman now, this way they'd have to figure out 3x the amount of politicans in the same amount of time?

Term limits will guarantee Sarah Palin's are the norm in congress.  A constant stream of rookie dumbasses who are used like a 3 dollar hoe by the lobbyists and TPTB. 

Meanwhile, by the time the honest ones learn, they're out.

Great plan, I can just see how it makes us better, with all the sohpistry lining the pockets, how could it not deliver everything people want.

Especially when the alternative is just to make better decisions to begin with.  Every election is a term limit, potentially, for whoever sucks. 

So this is really about a loss in the faith of the average American to make choices.  While right now that probably is somewhat true, hell very true, it won't always be that way.  We're still in the REPUBLICAN REVOLUTION momentum.  It's slowing down, this crisis will be it's death knell.  Once that is gone, this whole bs culutre will change, and we'll make better choices.  We have to get there, but by HOOK or by CROOK, we'll learn.

Term limits are a shacklel, that accomplishes nothing, and prevents much.

It's about as smart as trickle down economics, or green ideology, or they hate us for our freedoms.


If the GOAL is BETTER congressman, what DIRECT benefit for getting better congressman would we have from being implemented? NOTHING.

YOU DON"T GET SHIT from it.  You definitely stop alot of good people.  Maybe not right this second, but past and future are different.

People just don't understand when you find a good strong reliable horse, you ride him until he's dead.  You don't retire him at 5 years old, you get a good 20-25 out of him.  What do we get for losing all that extra stuff?  Nothing, but the sohpistric impact on our minds that we might get better candidates because more will go through the system.

Color me a BIG SKEPTIC, because it makes NO SENSE.



StychoKiller's picture

The key is choosing WISER, not more OFTEN.

Kinda hard to "choose wiser", when the incumbent is paying id10ts for their votes (indirectly, of course!)

Remove the advantages of incumbency, such as gerrymandering & franking, then restore the number of voters represented by one congress person to the 32,000 or so mandated by the US Constitution.  Given the current population of 320,000,000,

each congress person currently represents around 735,000 or so, making it easier to stay in office -- after all, it's easier to get a majority of 32,000 to agree that an incumbent is doing a lousy job than to get a majority of 735,000 to do so.

Next, publish a public record of EVERYONE that donates over $1000 to anyone's campaign -- no more anonymous donations, period!  Once we KNOW just who the congressman from Exxon is, we can watch for any quid pro quo voting and act accordingly.

BobPaulson's picture

I think until we see that we need fewer people, organized in smaller groups, there can never be anything remotely close to democracy. It's simply outside our evolved capacity to care about too many other people and juggle the relationships.

goldfish1's picture

Of course, that would require that "we" do something about it.

Or get out of the way as it self destructs.

In the meantime start your own local community economy, barter, kinship outside the system, outside the "law", outside the dollah. 

SRV - ES339's picture

Don't worry Turd, another few weeks and you'll have Sharron Angle, Christine (can't touch that) O'donnell, and the rest of the gang riding into town to replace the Graysons (you know... rich guys that stand up for the less fortunate) in Congress.

Good luck with that!


Turd Ferguson's picture

Whatever. I don't know anything about Sharron Angle. Nothing. But I know all about Harry Reid and he deserves to be FIRED. Period.

AxiosAdv's picture

Could not agree more Turd.  I can't stand this guy.  He's everything that's wrong with DC...and that's a lot of stuff.

SRV - ES339's picture

Ax (and Turd)

You just don't get him then. He is the ONLY one on the left that isn't too worried about his job to get down and dirty with the right... he's going after them with their own playbook.

He's the real deal, and I'm sure if you took the time to understand him, you'd get it. Don't know about you, but anyone that can make Ben squirm like this is OK with me!


Handle with care's picture

We need an asshole.  We need someone who is mad as hell and isn't going to take it any more.  We need someone who treats the Wall St criminals and their Washington lickspittles with the contempt they deserve.


We need someone who has no time for the polite pablum that sooths the masses and eases the collapse of the Republic.


We need a bull in the china shop.  We need an enraged lion tearing everything apart.  We need a rabid dog attacking and tearing at everything.


Unless you believe that the corrupt kleptomaniac sociopathic oligarchs will relinquish their privileges if asked politely?

weinerdog43's picture

Thank goodness diaherra gobbling, anus nibbling, douchewater drinking pussholes like you are not in charge either.  Fuck you very much and have a nice day!


My that came out pretty harsh.  Sorry, Turd, but your mom spilled her water bowl over here and I was kind of upset.

Boilermaker's picture

I hope Michael Williams doesn't 'commit suicide' accidently.  It seems to be a thing with the GSE executives.

sweet ebony diamond's picture

Grayson going for the votes.

Barney right behind him.

Dr. Engali's picture

Grayson might like Barney behind him. They can take turns Franking each other.

MsCreant's picture

I'm sorry, but I think Barney would be a bottom, not a top.

Miles Kendig's picture

His reason for frequenting Chez Shalom .. and nice one on the dome as what we're seeing is precisely how it's structured to operate.  With deep forethought and everything.  Simply amazing.

MsCreant's picture

Did Barney come kicking and screaming to this party? Does Grayson have pictures? Or is it all election Kabuki Theater?

Bob's picture

We all know that in hierarchical organizations, we must share credit for our work with the people "above" us, in this case the senior Bawney Franks.  It even strikes me as a good move, because it shows the Fanniecrats not only that it's more than just the rantings of a freshman senator, he is backed by a powerful committee chairman whom they know very well.  It's the right move for effect, though for selfish political considerations he's do better to go it alone, IMO. 

Is it all election theater?  We'll see if Grayson stays the course.  But is it not good to have a congressman putting these issues out before the public--kicking ass and taking names?  If that sets the standard for future politicians, I really can't find the downside here. 

SWRichmond's picture

I think you answered your own question.

Cognitive Dissonance's picture

He almost asks the correct one:"Is Fannie (and Freddie) a shell operation to willfully and illegally transfer non-existent deeds to servicer banks so they can collect subsequent cash flows associated with misappropriated properties, while receiving tens of billions in taxpayer funding each and every quarter."

The secret is to appear to be defending the public interest without actualy doing so. Mission accomplished.