Bachus Calls for Investigation into Fannie Mae Whistleblower Allegations
Rep. Spencer Bachus (R-Ala.), the ranking Republican on the Financial Services Committee, sent a letter to committee chairman Barney Frank (D-Mass.) requesting an investigation into the recent allegations against Fannie Mae. Last week, Fannie Mae denied allegations made by Caroline Herron, a former employee at the government-sponsored enterprise (GSE). Herron said the company, which was allegedly hired by the Treasury Department for $113m to run the Home Affordable Modification Program (HAMP) allegedly runs the program to better its own balance sheet, not to help homeowners. Herron is suing Fannie Mae for firing her for requesting reform in the program. In a letter dated Aug. 6, Bachus requested that the committee hold a hearing this month to "examine whether Fannie Mae executives mishandled and mismanaged Federal foreclosure mitigation programs, including the Home Affordable Modification Program (HAMP)." Bachus requested testimony from Herron, and he wrote if her allegations were true, it would "help explain why HAMP has been such a failure." Fannie told HousingWire last week the company hired a law firm to investigate the allegations back in March, when Herron notified the company. A spokesperson at Fannie Mae said the investigation found "no merit," and Herron did not participate in it. Lynne Bernabei, Herron's attorney in the case, said they told Fannie they would participate, but Fannie said they would not be allowed to respond to the findings or view the report. But a source familiar with the situation told HousingWire that Herron and her attorney received one oral request to participate in the investigation and three written ones. Frank's office said the congressman was traveling, and it was not immediately known if the letter was under consideration. Write to Jon Prior.