Fannie Mae and Freddie Mac would be required to report incidents of actual or suspected mortgage fraud to their primary regulator -- the Office of Federal Housing Enterprise Oversight -- under a proposed rule issued by OFHEO."This rule will ensure that Fannie Mae and Freddie Mac do their part to help combat mortgage fraud," said OFHEO Director Armando Falcon Jr. "The enterprises will now have a clear obligation to report fraud and help prevent a repeat of cases like the First Beneficial matter." In a federal investigation of First Beneficial Mortgage Corp., Charlotte, N.C., it was discovered that Fannie officials suspected FBMC had sold Ginnie Mae fraudulent loans, but they did not inform Ginnie. OFHEO is issuing the proposed rule for a 30-day comment period. Separately, OFHEO has issued a directive requiring notification by Fannie and Freddie when they become involved in investigations and legal proceedings, as well as civil and criminal actions.

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