Fannie Mae Finds No Merit in HAMP Whistleblower Allegations

Fannie Mae said there is no merit to the allegations put forth by a consultant who told National Public Radio she was fired after revealing the company was hindering progress for the Home Affordable Modification Program (HAMP). Caroline Herron told NPR that the Treasury Department hired Fannie to run HAMP for $113m. After she left Fannie, she returned as a consultant for the HAMP project, but said the company ran HAMP to push its own bottom line, not to help borrowers. She’s now suing Fannie Mae, alleging the company fired her for pushing HAMP reform. Fannie Mae told HousingWire that Herron, through her attorney Lynne Bernabei, notified the company in early March of her potential allegations. Fannie then hired the law firm Fried Frank, which specializes in corporate matters, to conduct an independent investigation into the allegations. Former Inspector General of the Department of Justice Michael Bromwich led the investigation, according to Fannie Mae. “Ms. Herron was invited to participate in that investigation but she declined to do so. The investigation found no merit to her allegations,” Fannie Mae said. The Treasury launched HAMP in March 2009 to provide servicers incentives for the modifications of loans on the verge of foreclosure. To date, participating servicers have provided 389,198 permanent modifications, just over 13% of the mark set by the 3m to 4m by 2012 set by the Obama Administration when the program launched last year. Write to Jon Prior.

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