Tucson, AZ – October 19, 2010 – (RealEstateRama) — Rep. Raúl M. Grijalva today announced his call for a full audit of three major mortgage lenders in the wake of revelations about improper foreclosures nationwide based on dubious paperwork and legally suspect lender behavior. Grijalva sent a letter Oct. 15 alongside Reps. John Conyers, Marcy Kaptur and Alan Grayson to the inspector general for the Troubled Assets Relief Program (TARP) asking him to conduct an audit of Fannie Mae, Freddie Mac and GMAC, which together control millions of mortgages around the country.
According to recent news accounts, many GMAC foreclosures and evictions have been based on sworn employee affidavits that contained information company employees did not know was true. Those affidavits were sometimes processed and signed without a notary or other authorized official present, leading to fears that GMAC had become an eviction mill operating outside the usual boundaries of mortgage lender behavior.
“As a recipient of approximately $17 billion in TARP funds and with American taxpayers as the major shareholder, it is not enough simply to tell GMAC to clean up its act,” the letter says. “It is critical that the individuals responsible for any fraudulent acts be prosecuted and removed from the business in and around housing and finance.”
TARP is the official name of the government program designed to shore up the financial sector in the wake of the economic downturn. Grijalva voted against the original TARP bill because he felt it contained too few oversight mechanisms. He has been at the forefront of housing reform efforts and in April introduced the Right-to-Rent Act, which would allow homeowners facing foreclosure to stay in their homes for up to five years as renters at fair market value set by a judge.
“I’ve said it before, and I’ll say it again: Mortgage reform is not a second tier or niche issue,” Grijalva said. “The economy we’re facing now is in part a direct result of the housing collapse brought on by predatory lending and irresponsible policies. I’m proud to have voted for the Wall Street Reform and Consumer Protection Act, which clamps down on these abuses, and will continue to fight for homeowner protections as long as I’m in Congress.
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