Fannie Mae Independent Counsel Report
As an investor advocate, Lavalle took one share of stock in many mortgage, Wall Street, and banking companies so as to allow him access to annual meetings and make complaints as a shareholder. One such company Lavalle targeted at the turn of the century was Fannie Mae whose servicers he found to engage in foreclosure fraud abuse by routinely filing false pleadings, affidavits, and assignments of mortgages in courts across America, not unlike the fraudulent paperwork that has since made “robo-signing” a household term.
Even then, Lavalle found, the nation’s electronic mortgage registry system, Mortgage Electronic Registration System, was playing fast and loose with the law — something that courts have belatedly recognized, too. Lavalle's efforts to get Fannie Mae to investigate its servicers' abuses and frauds began increased in 2003 with letters to the Fannie board of directors and their CEO, Franklin Raines. After Fannie Mae was investigated for major accounting fraud and abuse after post-ENRON, the Fannie Mae board listened to Lavalle and caused in 2005 an independent counsel investigation to be undertaken by Baker Hostetler, a prestigious D.C. law firm.
In 2006, after months of interviews with Lavalle, Fannie Mae executives, and a review of Fannie Mae's securitization, foreclosure, and legal practices and procedures, the independent counsel, Mark Cymrot issued Report to Fannie Mae Regarding Shareholder Complaints By Nye Lavalle, OCJ Case No. 5595.
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