Fannie Mae has agreed to forfeit $7.5 million to the government after investigators accused the company of not blowing the whistle on a fraudulent North Carolina mortgage lender that took Ginnie Mae for at least $23 million.Fannie Mae was also defrauded by the lender, First Beneficial Mortgage, but forced the company to repurchase loans it had sold to the government-sponsored enterprise. The government said Fannie knew the money it received from First Beneficial was fraudulently obtained from Ginnie Mae. The Department of Justice said that in settling the matter, Fannie waived its right to a hearing that would have determined whether the GSE received $6.5 million from First Beneficial "without knowledge of their fraudulent origin." The $7.5 million that Fannie forfeited includes $6.5 million in principal and another almost $1 million in interest. In a statement, Fannie senior vice president of communications Chuck Greener said, "Fannie does not wish to retain the funds or benefit from First Beneficial's illegal activities." Mr. Greener said the GSE now considers the matter closed, adding that the congressionally chartered company "will continue to work to defeat fraud in the mortgage industry."

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