that banks could sell 30 year mortgages to in order to lend the money out again. The bank was paid for servicing the mortgage and the interest above that went to Fannie Mae.

It worked out very well while mortgages were below 5% in the 50s and early 60s. Enter the whole mess that OPEC caused with mortgage interest shooting up into double digits and Republicans started to realize just how much money Fannie Mae was making for the government. Needless to say, they privatized it as fast as they could. Someone pointed out it was a monopoly so they grudgingly allowed the creation of Freddie Mac to give the illusion of competition.

They both buy prime 15 and 30 year mortgages sold to working people. They have been resistant to any of the fancy scams that have come along since the 70s, peaking in the housing bubble 00s.

Undoubtedly, the sale of housing to non profits is being seen as the latest in a long line of scams. I'm not surprised the two big mortgage buyers wouldn't go for it, it's just not their business model.

Prime mortgages were the last ones to be affected by the bursting of the housing bubble, either because people lost their jobs or were transferred and found it impossible to sell a house unless it was priced at considerably less than on the mortgage certificate or they were deeply under water and panicked, sending in jingle mail and moving. That's why the Big Two had to be bailed out. They hadn't done anything fast and loose, they were just in the way when real scams blew up.

The honey trap for risky mortgages was Indy Mac, allowed to go under and be reorganized several times during and after the crash.

“Fast and loose?” Fannie Mae’s Residential Servicing Guide instructs their servicers to file an Assignment of Mortgage in their own name and file foreclosure actions in their own name as well even though Fannie owns the loan. Then after foreclosure, they instruct their servicers to transfer Title over to Fannie in the most cost efficient way.

A false Assignment filed in the land records is an example of Recording Fraud. Presenting false information to the court is Fraud upon the Court. Foreclosing upon a property by a party that has no such right is Wrongful Foreclosure. A credit bid from the servicer at Sheriff Sale is Auction Fraud.

Fannie’s present business model is most definitely non-compliant with state laws.

Fannie got into trouble when their MBS blew up the same as everyone else’s, but they were designed to fail from the start.

Considering how Fannie is presently operating, how can you view the conduct of non-profits as “scams”?

If Fannie was willing to sell a property to some party for say $100,000, why should it insist on $200,000 as a selling price to a non-profit? I think the non-profit should be entitled to the same selling price as any other buyer.

Do you think Fannie Mae’s business practices should comply with state law or do you think their business practices should supersede state law?

because it led to riskier practices that never would have happened had they had the kind of government oversight they were supposed to have.

They've been taking things away from the commons for far too long. If FAnnie Mae and Freedie Mac are in a mess, it's because they are no longer government entities.

It saddened me greatly when I learned how the GSE’s were presently operating.

I suspect sticky fingers Gingrich didn’t do Fannie any good. It’s as though these entities are “captured.”

For a time I researched Fannie’s bulk sales of homes. Fannie has special “approved” buyers, companies which are often times owned by Hedge Funds. There was one property in Florida which Fannie sold to a bulk buyer for $500. I checked the land records and other sources and put the story together. The homeowners had mortgaged the property for over $90,000. A few years into the mortgage, they divorced. By the time the servicer foreclosed and obtained the property, there was supposedly over $120,000 due. The servicer Titled the property over to Fannie and Fannie bulk sold it for $500, a property with a value of $100,000 at the time.

(Folks from the Occupy movement purchased debt just so they could forgive the debt. Wouldn’t it be grand if those same folks were Fannie “approved” buyers? At $500 or $1,000 a pop, we could eliminate our homeless population. Oh but the Hedge Fund boys would be displeased.)

There were many things I couldn’t determine about that property and mortgage which just threw up a bunch of questions in my mind. Was the loan in Fannie’s portfolio or did investors have beneficial interest in the loan? How did Credit Enhancements and Credit Default Swaps (insurance) impact the actual balance due? Had the homeowners unknowingly paid an insurance premium in their mortgage payments with their servicer as the beneficiary upon foreclosure? Did we taxpayers make up any supposed loss to Fannie?

Massachusetts passed a law which appears to me to be an effort that is supportive of homeowners. I’m delighted to see government, state government even, insist on some responsible & law abiding action from the GSE’s.