4ClosureFraud reaches back more than eleven years to tell the tale of how Fannie Mae discovered that Taylor Bean had sold it bad loans, but decided not to mention it, and how Freddie Mac stepped in and became the primary recipient of those fraudulent transfers when Fannie Mae cut off its dealings with Taylor Bean.
On April 1, 2002, Fannie Mae management decided to terminate its contract with Taylor Bean because of “fraudulent loans” and “other serious concerns,” according to the summary document. In addition to the $1.7 billion servicing portfolio, Taylor Bean had an outstanding balance on Fannie Mae’s advance payment line of about $189 million, according to the document.
At that point, the chronology stated, Fannie Mae could have refused to buy any more loans from Taylor Bean, blocked the company’s access to its online loan processing programs, and seized the servicing rights, shifting those contracts to another company without compensating Taylor Bean.
It did none of those things. Fannie Mae wanted to preserve the value of the servicing portfolio, which would plummet if it reported that Taylor Bean was selling bogus loans, according to the summary document and Smith’s deposition.
It appears that many of the loans have been double and triple sold, and the article indicates that Taylor Bean would likely have collapsed in 2002 but for the ongoing fraud.