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Mortgage-finance company Freddie Mac said that it would send a $1.7 billion payment to the Treasury in March as it reported a higher profit for the fourth quarter, driven by increased interest rates, the Wall Street Journal reported today. Freddie posted a profit of $2.16 billion, up from a prior-year profit of $227 million. The latest quarter included a net $300 million gain related to higher interest rates, which increased the value of the derivatives that Freddie uses to hedge interest-rate risk. Those derivatives gained $744 million in the quarter.

Democratic presidential hopefuls Bernie Sanders and Hillary Clinton are flooding Nevada with volunteers ahead of this week's key nominating contest but they face a problem — the addresses, phone numbers and other personal data they need to reach many voters are out of date, according to a Reuters analysis yesterday. Nevada, which is more than a quarter Latino, was one of the states worst affected by the 2008 financial meltdown, with hundreds of thousands of families unable to pay their mortgages and forced to move in a crisis that by some estimates hit minorities twice as hard as whites. The foreclosed homes often switched hands multiple times — from homeowner to bank to investor and back to another homeowner in just a few years. That has made it difficult to track voters who at some point lived in those homes.

The Justice Department, the Department of Housing and Urban Development (HUD) and the Consumer Financial Protection Bureau, along with 49 state attorneys general and the District of Columbia’s attorney general, have reached a $470 million agreement with HSBC Bank USA NA and its affiliates (collectively, HSBC) to address mortgage origination, servicing and foreclosure abuses, according to a Justice Department press release on Friday. The settlement reflects a continuation of enforcement actions by the department and its federal and state enforcement partners to hold financial institutions accountable for abusive mortgage practices. The settlement parallels the $25 billion National Mortgage Settlement (NMS) reached in February 2012 between the federal government, 49 state attorneys general and the District of Columbia’s attorney general and the five largest national mortgage servicers, as well as the $968 million settlement reached in June 2014 between those same federal and state partners and SunTrust Mortgage Inc. “Even as the mortgage crisis recedes, the U.S. Trustee Program will continue to combat mortgage servicer abuse of the federal bankruptcy laws so that homeowners are given their legal right to try to save their homes,” said Director Cliff White of the Justice Department’s U.S. Trustee Program. “This settlement holds HSBC accountable for its actions and helps to protect the most vulnerable homeowners.”

The Federal Housing Finance Agency (FHFA) announced yesterday that Fannie Mae and Freddie Mac are changing their loan purchasing rules to establish an independent third-party review process for loans that trigger a repurchase request due to perceived violations of the government-sponsored enterprises' representation and warranty framework, HousingWire.com reported today. The FHFA, Fannie Mae and Freddie Mac announced yesterday that they are implementing an independent dispute resolution process for resolving repurchase disputes, completing the planned scope for the selling representation and warranty framework. The new process allows lenders to submit unresolved loan-level disputes to a neutral third party arbitrator after the appeal and escalation processes have been exhausted, the FHFA said.

Wells Fargo & Co. said today that it agreed to pay $1.2 billion to resolve certain civil claims government regulators had pending against the company, MarketWatch.com reported. The claims were related to the bank's Federal Housing Administration lending program from 2001 through 2010, and other potential civil claims. As a result of the payment, Wells Fargo said that it reduced its 2015 earnings by $134 million, or 3 cents a share. "Although the company and the Federal Government have reached an agreement in principle to resolve these matters, there can be no assurance that the company and the Federal Government will agree on the final documentation of the settlement," Wells Fargo stated in a regulatory filing. 

A New Jersey man has been sentenced to six years in prison for running a scam that victimized distressed homeowners and private investors, NationalMortgageNews.com reported yesterday. Randy Poulson was accused of netting about $3 million in illegal profits from his fraudulent scheme, according to a Justice Department news release. Poulson, working through his businesses Equity Capital Investments, Poulson Russo LLC and South Jersey Real Estate Investors Associates, lured victims into attending his paid seminars on real estate. His scheme also included promises to pay the mortgages of homeowners who faced foreclosure, if they sold him their homes. After obtaining the deed, he would then stop making mortgage payments, causing the loans to default. Read more. 

For further analysis of commercial fraud cases, be sure to pick up ABI’s Fraud and Forensics: Piercing Through the Deception in a Commercial Fraud Case.