Freddie and Fannie Sell Your Home Loans to Vultures for Pennies on Dollar: Vultures Pick the Bones of Distressed American Homeowners

Photo Apr 02, 10 57 26 PMFreddie Mac Kicks Off 2016 with Largest Ever Delinquent Loan Auction article here:

The transaction announced on Friday is Freddie Mac’s third bulk NPL sale worth more than $1 billion. The previous two were worth $1.1 billion each. Overall, it will be Freddie Mac’s ninth bulk Standard Pool Offering (SPO) auction since the first sale closed in August 2014 and the two EXPOs will be the second and third sold. Freddie Mac’s first-ever EXPO sold in June via auction to Corona Asset Management, and included 157 deeply delinquent loans with an aggregate UPB of about $31 million.

Everybody loses!  And by “everybody” I mean you, if you’re an American homeowner, because everybody else is making out like a bandit while killing home values and throwing homeowners on the street after stripping their last dollar.   The investors were paid. And Freddie Mac  and Fannie Mae didn’t lose because they were mere “guarantors” leaching off the government spigot whilst refusing homeowners the principal reduction relief that might have actually saved a few million homes (I’m talking to you FHFA execs; you know who you are and you know what you did).

Reminder to the non-insiders:  Freddie and Fannie were the notorious quasi-governmental GSEs (government-sponsored-enterprises that are sorta government but sorta not until taken under conservatorship because they mismanaged themselves so egregiously) (as in wink, wink, they were “private” but counter-parties knew there was a secret pact for the US federal government to back them).  In sum, Freddie Mac and Fannie Mae were behemoth welchers who had to be rescued by the federal government for their own epic accounting failures not merely confined to home lending but to multiple abuses.  Oh, and then there are the vultures, the buyers of these loans, on questionable ownership of the collateral paper, for pennies on the dollar, knowing that they are “scratch and dent” and paying nothing for them but “betting on the come.”  Hooray for gambling!  Double points for gambling with middle class Americans’ homes and wealth.  Many of the vultures were founded by the same fine executives who used to work for Countrywide, Fremont and some of the other geniuses who managed to get rich, evade prosecutions, and kill the dreams of roughly millions of American families.  These vultures employ upstanding “default servicers” to “play lender” (i.e. go in and defraud courts, judges, and cloud the public title records by just outright pretending to “be” the “lender,” a mockery of the meaning of most of the states’ statutes governing foreclosure–judicial or non-judicial) and try to collect full boat for their grab bags of bargain basement loans.

And who would like to accept my wager that a large percentage of these allegedly “defaulted” or “delinquent” loans aren’t even defaulted or delinquent but were manipulated into foreclosure by the sharp tactics of Fannie, Freddie, and the fine servicer henchmen at their command.  It’s difficult to pay when they keep sending your money back, or putting it in “suspense accounts,” or wrongfully applying it to force-placed insurance when you’ve sent proof of insurance 700 times.  It’s difficult to pay when the correct owner of your loan is already paid and you’re paying an agent of an undisclosed “principal,” with the agent pretending to be the principal.  I’m just spit-balling based on about 100 cases I’ve seen….

 

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