Freddie Mac faulted by IG in $2 billion mortgage fraud loss

[Geee]

Washington Times:

The federal government’s giant housing agencies could have saved taxpayers billions of dollars from mortgage fraud in a celebrated case involving Colonial Bank and Taylor, Bean and Whitaker, if they had shared more information with each other and conducted better audits.

 

That was the conclusion of the inspector general for the Federal Housing Finance Agency being released Tuesday, which found that a massive fraud perpetrated by Taylor Bean’s chief executive, Lee Bentley Farkas, which landed him in prison in 2011 could have been detected earlier. Had the agencies been more on the alert, they might have prevented nearly $2 billion of losses at Freddie Mac, nearly $1 billion in losses at Ginnie Mae — two of the government’s three mortgage-finance agencies — as well as billions more in losses at private banks that did business with the firm.

 

 

The report from FHA acting Inspector General Michael P. Stephens noted that in this case, Fannie Mae did take steps to avoid falling prey to the conspiracy between Colonial and Taylor Bean to defraud investors in mortgages they originated, securitized and sold to the government agencies and private banks.