Thursday, November 12, 2009

Matz Asks FHFA to Force Fannie to Offer Better Settlement

National Credit Union Administration (NCUA) Chairman Debbie Matz on November 9 wrote the Federal Housing Finance Agency (FHFA) encouraging that regulator to get Fannie Mae to offer a more reasonable settlement to credit unions defrauded by CU National Mortgage.

Chairman Matz noted that approximately two dozen credit unions were scammed by CU National to a tune of more than $125 million in potential losses. CU National sold mortgage loans to Fannie Mae but did not remit sale proceeds back to the originating credit unions. Fannie Mae offered a settlement equal to approximately 15 percent of potential losses in August and subsequently raised the offer to closer to 25 percent, with a 3 percent bonus if at least 18 credit unions agreed to the offer. The NCUA said only two credit unions have agreed to the settlement.

"The outcome seems especially egregious considering Fannie Mae's status as a government-sponsored enterprise, and doubly so in light of the fact that it is currently in conservatorship and receiving billions of dollars of taxpayer assistance," wrote NCUA Chairman Matz to FHFA Acting Director Edward DeMarco.

Talk about the pot calling the kettle black. Federal credit unions have received the equivalence of taxpayer assistance being exempt from paying income taxes for the last 75 years.

Letter below. Click on image to enlarge.


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