FHFA Inspector General Steve Linick said he has opened "numerous" criminal and civil investigations of lenders, servicers, individuals and other firms that have victimized Fannie Mae and Freddie Mac.
The Federal Housing Finance Agency IG told the Senate Banking Committee on Tuesday that he cannot comment on specific cases.
However, Linick testified that the "types of cases that we are actively investigating" involve fraud involving loan originations, loan modifications, short sales, and REO transactions.
Mortgage origination fraud is the "most common,” he said, and sometimes involves loan officers funding mortgages for ineligible borrowers. "We have also seen schemes involving appraisers inflating the value of property and straw buyers," according to his written testimony.
"Fraud involving mortgage servicing can include allegations that the servicer is not acting in the best interest of the GSE or the investor,” he said. “For example, a mortgage servicer may make decisions regarding modifications or loan foreclosures with its own personal benefit in mind, contrary to GSE guidelines.”
The FHFA Office of Inspector General is mainly tasked with watching the way the agency oversees the actions and operations of Fannie and Freddie.
