a clusterfuck. When American Home Mortgage went bankrupt, Freddie Mac seized
$7 million in payments that homeowners had made, some of which was for insurance
payments and property taxes. But American Home refused to give Freddie Mac the
files saying who should be paid what. "Therefore, there is the imminent
risk that borrowers’ insurance policies may lapse for nonpayment, subjecting
the borrowers to a risk of loss of their mortgaged properties," Freddie
Mac now says.
The amount of ill-will and incompetence here is staggering. Freddie is trying
to become a loan servicer overnight, despite the fact that it has no abilities
in that area. AHM is perfectly happy hanging its borrowers out to dry in its
attempt to sell its loan-servicing operation for the maximum amount of money.
The result is physical confrontations:
In court documents, American Home said Ginnie Mae representatives "stood
in a line in front of the doors and sat on the stairs, preventing AHM Servicing
employees from entering the office." Freddie Mac said American Home "had
its security personnel escort the Freddie Mac representatives out."
Oh, for a powerful regulator who could really bang some heads together here.
The harder the better.
(Via Tanta)