An open letter to the NEW CEO of Freddie Mac: While Freddie Mac Fiddles, California Burns

January 18, 2010

Charles E. “Ed” Haldeman, Jr
Chief Executive Officer
Freddie Mac
8200 Jones Branch Drive
McLean, VA 22102-3110

Dear Mr. Haldeman:

This is not my first time writing Freddie Mac, HUD and U.S. senators regarding Freddie Mac’s seemingly anti-competitive actions in the California marketplace.

Last year, I wasn’t alone in calling out Freddie Mac’s unfair practices. It was echoed in other media and even among several lawmakers.  In particular I’m concerned with unresolved and continuing questionable business practices in the California real estate market.

In early 2009, Freddie Mac sent out a Request for Proposal (RFP) to a group of pre-selected Natural Hazard Disclosure (NHD) companies in California.  This, immediately, got my attention. By limiting the companies who received the RFP to First American and several small regional companies unable to meet the RFP requirements, while excluding qualified NHD companies from being considered, Freddie Mac succeeded in short changing the American home buyer by removing their right to choose from a collection of qualified providers.  Mr. Haldeman, as you can see, this exclusion lends further credence to the idea that your organization wasn’t acting with transparency, openness or fairness during this very influential process.  In fact, it appeared that Freddie Mac was attempting to pre-determine the “winner.”   And by selecting only one provider for these services, it appears California home buyers and sellers were the ones who would be shortchanged.

After my letter and others, most notably one from Sen. Jim Costa (D-Fresno), were sent, Freddie Mac appeared to relent and issued a second RFP, giving new firms about 48 hours to respond so they could be considered as additional Freddie Mac approved NHD report providers.  Despite the short time frame, several NHD firms submitted completed RFPs and began to wait to hear a decision from Freddie Mac.

And now, months and months later, they continue to wait.

And while these companies wait, Freddie Mac continues to treat First American Title’s FANHD as their preferred and only provider.

What amazes is me, is that nearly a year later; these qualified NHD firms continue to wait for a response from Freddie Mac.   Each time a firm contacts Freddie Mac, they are told that “Freddie Mac is too busy to respond to RFPs,” despite having issued one.

Mr. Haldeman, why won’t Freddie Mac respond?  It is no secret to those of us in the industry that Freddie Mac is using First American Title’s FANHD, nor is it a secret that First American Title CFO, Anthony “Buddy” Piszel used to be Freddie Mac’s CFO.

May I remind you the threat to harm competition is contemplated in the California Business & Professions Code Section 17200 as unfair business practices. In addition, from what I can find, this arrangement appears not comply with federal and California antitrust and unfair competition laws, and could possibly be a violation of the Sherman Act.

I imagine that you are aware that Natural Hazards Disclosure Reports are a settlement service as defined by, and regulated by HUD (the Department of Housing and Urban Development). Consequently, exclusive business arrangements like this one between Freddie Mac and First American could easily merit a look to see if they have restricted competition and thus, eliminated small companies and jobs in the state of California as well as a RESPA violation.

Mr. Haldeman, while you were not Freddie Mac’s president when the exclusive agreement between Freddie Mac and First American took place; you are now.  Stop this unfair exclusive agreement designed to eliminate competition and jobs in California.

I look forward to your reply,

Serena Ehrlich
Publisher and Editor,

CC:     HUD (Housing and Urban Development)
FHFA (Federal Housing Finance Agency)
GAO (General Accounting Office)
Senator Feinstein
Senator Boxer


Choosing Quality over an RFP

I wanted to share this recent comment to our last blog post:  Following Up on Freddie Mac: What Has Happened?


I found your post very interesting. Especially the suspicious behavior you cited:

“In talking to a number of other disclosure companies in California I discovered that the only ones which received the initial RFPs from Freddie Mac were several regional disclosure companies who would have not met Freddie’s criteria to become a supplier of disclosure reports. Somehow the disclosure companies which would have qualified ***never received an RFP.*** ”

“I am still getting feedback from the disclosure companies who completed and submitted these RFPs saying that they never heard back from Freddie Mac, despite submitting their RFP responses ***within the 48 hour deadline.***

Maybe we should only buy our disclosure reports from those companies. Please let us know who they are!




Dear Rick,

I wish I could just give you a list and send you on your way.

As you know, when it comes to selecting disclosure service providers, we at RE-Insider continue to encourage realtors to choose their partners based on the product’s quality, accuracy, thoroughness, high-level of customer service, insurance coverage and more.  No matter how it is sliced, there are no shortcuts when making this decision, including a rushed RFP.    We strongly continue to believe that selecting a natural hazards disclosure company based on the submission of an RFP vs. quality of service and the report does not represent the good faith effort that is expected of real estate professionals.

Thank you so much for your question.  I hope this helps, if you have any other questions or comments, please let me know!