Tuesday, July 28, 2009

Latest Freddie Mac Attack! Secret Monopoly Formed with First American Title!

Ever since the U.S. government took over control of Freddie Mac after bailing them out with over $200 billion of taxpayer monies, you’d think this insidious publicly-traded company would start acting with some level of President Obama’s transparency! No such luck.

This company, which is a significant reason we are experiencing a mortgage crisis that is devastating the American way of life, has just made a secret and exclusive alliance with one of America’s most unscrupulous companies in the real estate industry -- First American Title, who is notorious for violating RESPA across the United States, and who has a public history of lawsuits from government agencies across the nation. This very same company has ensured that one of its divisions, FANHD, is now the exclusive provider of NHD reports for EVERY California Real Estate Owned (REO) property sold in the state.

Freddie Mac is engaging in cornering the California REO NHD market to the benefit of one company, First American Title’s FANHD. In fact, it refuses to sell any REO properties if the buyer will not bend to their stipulation to use only one selected company. WOW!!!

Talk about unfair competition!! This is nothing short of a monopoly for all their REO transactions. Did anyone at Freddie Mac think about the illegality of their actions, and the complete disregard for the principles of fair competition in their illicit arrangement?

Here are some basic irregularities to consider:

1. Natural Hazards Reports are required by law in California and considered by RESPA to be a settlement service. Thus, the referral of these services is no different than the referral of title reports, which is a violation of RESPA sections 8 and 9.

2. Freddie Mac is under government control and required to comply with fairness in its negotiations. Freddie Mac has not put this service to bid nor published an RFP.

3. Freddie Mac with this arrangement is denying free market competition among NHD report providers in the REO market, thus violating federal and California antitrust and unfair competition laws.

4. The arrangement may impose restraints on trade in violation of the Sherman Act and under the Cartwright Act.

5. More importantly, this is fundamentally wrong for the state of California. This arrangement is creating additional unemployment and eliminating competition in the NHD industry.

If you haven’t done so already - send a message to our government officials to stop these insider dealings and support “timely” competition and the American way of life before it is taken away from all of us.

The quest is not only to create jobs, but also to preserve them!

cc. Secretary of HUD
FHFA
GAO
Governor Arnold Schwarzenegger
Senator Feinstein
Senator Boxer
President Obama
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