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Derek Kravitz of the Associated Press is reporting that Fannie Mae knew about allegations of improper foreclosure practices by law firms but did nothing — or at least not enough — to stop those practices.

Similar allegations are the subject of a probe by state attorneys general into how lenders and law firms ignored proper procedures to handle a crush of foreclosure paperwork.

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An unnamed shareholder warned Fannie Mae of alleged foreclosure abuses in 2003, the inspector general for the agency that regulates Fannie says in a report being released Tuesday.

Fannie Mae responded by hiring a law firm to investigate the claims in 2005. The law firm reported in 2006 that it had found foreclosure attorneys in Florida "routinely filing false pleadings and affidavits."

Fannie officials said they told a government official about the law firm's findings in 2006. That unnamed official, who now works for Fannie's regulator, the Federal Housing Finance Agency, said he couldn't recall the conversation, the report says.

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While the news is not surprising, it is still appalling. Lenders and their lawyers have been following unconscionable practices, and the watchdogs have been out to lunch. No wonder Occupy Wall Street has sprung up to protest corporate greed. Homeowners should not have to worry about whether they will be victims of foreclosure abuse within the legal system. This is a shame, and it's good that Fannie Mae is being called on the carpet, if the allegations turn out to be true.

Read more at the Huffington Post.

In other news: Should Black Women Take Part in SlutWalk?