Houston Texas Business Lawyer

Fannie Mae Accused of Hiding Fraud

The Federal National Mortgage Association (Fannie Mae) has been accused of hiding fraudulent behavior.  Fannie Mae reports to the Federal Housing Finance Agency (FHFA) and is a government-sponsored enterprise that buys residential mortgages from lending institutions.  Accusations of fraud center around Fannie Mae officials allegedly soliciting bribes or illegal payments from real estate brokers. house-for-sale-1235157-m

According to Biz Journals, one real estate broker who has come forward against Fannie Mae claims that the GSA retaliated against her for her attempts to reveal the fraud.  Retaliation against whistleblowers is prohibited by law, and those who face wrongful actions because they report fraud should consult with a whistleblower attorney.    Brewer & Prichard P.C. represents whistleblowers and assists individuals who have come forward to report illegal behavior.

Fannie Mae Fraud Accusations

The real estate broker making allegations was sued by Fannie Mae, which asked the court to enter a declaratory judgment that the agency had followed the proper legal procedures for terminating the broker's contract.   The broker had worked for Fannie Mae since 2005, managing and selling the agency's foreclosure properties. Despite reportedly receiving praise and earning top sales figures, her contract was terminated.

The broker claims that the contract was improperly terminated as a means of retaliation.  She points to the fact that a single Colorado real estate brokerage team had more than 100 Fannie Mae listings as evidence of the alleged fraud. Most brokers who had worked with the agency for a long time had just 20-30 properties assigned to them, leading to her suspicion that a scheme was being perpetrated based on bribery.  Her contract requires her to report fraud, but when she tried to do so in September 2012, she believes the retaliation began immediately.

Her property assignments allegedly dramatically decreased within weeks after the fraud allegations, and she reports that a Fannie Mae official refused to engage in a discussion with her about her accusations.

The fraud accusations that she has made are similar to a case where an Irvine, California Fannie Mae employee was indicted on charges of allegedly soliciting illegal payments from a real estate broker.

A spokesperson for Fannie Mae declined to comment on the ongoing case, other than to say that the agency believed the claims were without merit.  If the agency did retaliate against the agent, however, it may be in violation of the False Claims Act. The False Claims Act makes it possible for whistleblowers to come forward and report wrongdoing or criminal acts when government programs are being defrauded.  The Act not only protects reporters of fraud from retaliation, but its qui tam provisions also allow whistleblowers to receive a portion of money recovered as a result of speaking out to report fraud.

A trial date has been set for March 2015 to resolve the dispute. The application of the False Claims Act and the actions of Fannie Mae will both be issues raised at trial.

Contact a whistleblower attorney if you believe you have evidence of fraud. Call Brewer & Prichard P.C. today at 800-445-8710  or visit www.bplaw.com to schedule a consultation.