Lan Pham, an economist fired by the Congressional Budget Office one year ago, is still asking whether the agency appeared to "diminish or deny" the problem of foreclosure fraud while providing analysis to Congress.
"Why is one of the most powerful government agencies, one that can determine the direction of the nation's policies, diminishing or denying that the issue of foreclosure fraud rooted in mortgage securitization is a problem?" she said. "Recognizing it as a problem, we have $7 trillion in mortgage-backed securities that have brought chaos to homeowners, whether or not they are in foreclosure, and investors."
Attorneys general reached the$25 billion foreclosure abuse deal announced last month, but whether the agreement will be effective or impact other issues, like chain of title problems, is still uncertain.
With a Ph.D. from the University of Minnesota, Pham worked for the Congressional Budget Office (CBO) for only two and a half months before she was fired in December 2010. In Pham's termination letter, which she provided to ABC News, her supervisor, Deborah Lucas, CBO's assistant director, said "a number of performance issues are the basis for the decision."
But Pham said she was fired for providing an analysis about the banking sector and foreclosure fraud issues involving mortgage-backed securities and robosigning that she said displeased her bosses in the CBO director's office. Pham said the main issues of foreclosure problems relate to securitization, the pooling of mortgages that collateralize mortgage-backed securities, and the Mortgage Electronic Registration System, which has electronic records of ownership on about 65 million mortgages, about half in the country.
In her first interview since releasing a letter addressed to Sen. Chuck Grassley, R-Iowa, through the website Zero Hedge on Thursday, Pham said she is less concerned with losing her job but rather with bringing more transparency to her former employer.
"Because you see the losses around the country from those who purchased homes with banks foreclosing on homeowners that don't have the title to the mortgage, this is an issue where financially we're talking about a $7 trillion mortgage backed securities problem," Pham, who is on the job market, said. "To me, talking about my career is just beside the point."
Pham said she wrote a brief, or short paper, about the foreclosure crisis that presents alternative policy options to Congress and she said her supervisor rejected her discussions on the decline in property taxes, home prices, saying those issues had no relationship to foreclosures.
Pham said her supervisor handed her policy thoughts from Morgan Stanley and Goldman Sachs which "appeared to minimize the exposure of banks to securitized mortgage problems."
She said her supervisor said foreclosure problems were just media "sensationalism," and asked, "Don't you want house prices to go up?"
The CBO has produced analysis that shows the effects of foreclosures in the housing market, but has not detailed problems with foreclosure fraud. Those reports include one from August 2010 that states that "low levels of construction over the past two years have failed to diminish [excess vacant housing units] because the recession and a sharp rise in mortgage foreclosures have reduced the number of individuals and families able to maintain independent households."
Another report from December 2010 describes decreased property tax revenue and lower property values. The CBO discussed this relationship in its publications, but stated in their termination letter that Pham was incompetent for discussing this same relationship in her foreclosure crisis paper to Congress.
Pham wrote a letter to Sen. Grassley, ranking member of the Senate Judiciary Committee, dated Feb. 23, 2011, asking for help and explaining her story and writing that "there is room for doubt" about the perception of the CBO as objective and non-partisan.
After the Wall Street Journal published a story about the CBO, raising questions about how its assessments are compiled and including Pham's story, CBO Director Douglas Elmendorf published a blog post defending the agency.