AG Coakley: Fannie Mae and Freddie Mac Should “Change Course” and Allow Principal Loan Forgiveness for Homeowners

AG Coakley: Fannie Mae and Freddie Mac Should “Change Course” and Allow Principal Loan Forgiveness for Homeowners

Current Position Prevents Many Homeowners from Receiving Relief

BOSTON – Concerned that the refusal by Fannie Mae and Freddie Mac to engage in principal forgiveness and loan modifications for struggling homeowners is slowing the nation’s economic recovery, Attorney General Martha Coakley has sent a letter urging Fannie and Freddie to reverse this stance.

Leaders of Fannie Mae and Freddie Mac have expressed an unwillingness to participate in federal loan modification programs, including principal forgiveness. In a letter to the acting director of the Federal Housing Finance Agency (FHFA), AG Coakley insists that the FHFA should allow for principal forgiveness, guided by a net present-value analysis, which would increase loan modifications and help stabilize the housing market and economy.

“More than five million people have lost their homes due to foreclosure in the past five years, and millions more on the brink of foreclosure, struggling to stay in their homes,” wrote AG Coakley. “Fannie Mae and Freddie Mac should be a leader in the arena of loan modification best practices, not an obstruction. Fannie Mae and Freddie Mac should change course to serve both their own interests and those of the public and the economy.”

AG Coakley’s office has brought numerous actions against major banks and financial institutions with goal of keeping people in their homes and avoiding unnecessary foreclosures. These include actions against Fremont, Option One, Countrywide, Morgan Stanley, Goldman Sachs and Royal Bank of Scotland which all resulted in loan modifications designed to remedy unfair and unsustainable loans in Massachusetts. In the letter, AG Coakley points out that these modifications have helped thousands of people stay in their homes in Massachusetts.

The FHFA has acknowledged that principal forgiveness can serve the long-term interests of taxpayers when compared to foreclosure by combining the goal of asset preservation and foreclosure prevention. According to the FHFA’s own reports, fewer loan modifications have been implemented in September, October and November 2011, than any other month since November 2010. AG Coakley says in her letter that this trend must be reversed.

In addition, a comprehensive proposed settlement resolving allegations of servicing fraud with five major banks is expected to provide loan modifications featuring principal write-downs valued at billions of dollars. AG Coakley says that those discussions have brought into focus the unwillingness of Fannie Mae and Freddie Mac to use principal write-downs as part of its loan modification programs, and that their refusal will impact the ability of many homeowners to get the relief that they need.

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4closureFraud.org

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2012 02 02 Letter to Edward Demarco Re Fannie Mae Freddie Mac

Comments
6 Responses to “AG Coakley: Fannie Mae and Freddie Mac Should “Change Course” and Allow Principal Loan Forgiveness for Homeowners”
  1. Mannymjacintowpc says:

    HOMEOWNERS MAY MODIFY THE LOANS, RELEASE OF PRINCIPALS TO ZERO AND THAT’S JUSTICE.
    THE LONG TERM ISSUE IS HOMEOWNER BY NATURE, WILL HOCK THEIR HOMES AGAIN, GET INTO DEBT AND BACK THE SAME WAY.
    THE SOLUTION HERE IS HOMEOWNERS/BORROWERS NEED TO LEARN TO MANAGE THEIR FINANCES, LIVE WITHIN THEIR MEANS AND NOT GO BACK TO DEBT AND FEED THE LEECH WITH BLOOD. DEBT IS A CANCER
    AND NEEDS TO BE ERADICATED.
    CHANGE OUR EDUCATION SYSTEM OF MERE TEACHING A SKILL TO EARN A LIVING BUT RATHER TEACH TO LEARN TO BUILD GOOD CHARACTER, DISCIPLINE , GODLY MORALS AND MONEY MANAGEMENT. WE CANNOT CHANGE THE WORLD BUT WE CAN CHANGE ME. GANDHI SAID; BE THE CHANGE YOU WANT TO SEE. THE PROBLEM IS NOT ABOUT INFLATION, DEFLATION, CORRUPTION, GOVERMENTN OR POLITICS, ITS THE PEOPLE OR STARTS FROM ME. I AM PRACTICING NOW. HOW ABOUT YOU???

  2. Barbra Orr says:

    Another AG that cares about ” We The People” good job. It would be so nice if the Mae and the Mac just started doing what was right and fair. I am not sure it will happen as I think they are to greedy, trying to cover there rear, and to ignorant to realize they are not going to capture what has already been lost. Do you know what our company does we waive the accrued drop the rate to 0% on some properties just to keep them in the house. We are cordial, polite, friendly, know what has happened, positive re-enforcement, they talk with the person assigned to their account each time. You would be surprised what a difference that makes to homeowners

  3. lvent says:

    First they must prove they own the individual loans…and if the cant they should eat them. THE TRUTH NEEDS TO BE TOLD!!!!!…You cant refi, write down or modify massive, unsustainable debt fraud committed by these financial institutions…

    • lvent says:

      Those mortgage contracts are therefore a nullity…and must be rescinded because of the massive fraud they committed at the ORIGINATION…..THERE IS NO LEGAL OR MONETARY FIX FOR THAT…I REF– USE TO ESTABLISH THEIR DEBT BY SIGNING A NEW NOTE AND MORTGAGE….THEIR DEBT FRAUD IS MASSIVE AND CAN NEVER BE REPAID….THEREFORE THEY MUST RESCIND!

      • lvent says:

        Besides…the economy really sucks because of this manufactured mess…this moneyed elite Hitler Plan…they want us to fail and they are using the means of mass deception and lies to steal what we have left..no one is safe from the debt cartel and their weapons of mass financial destruction…their massive nuclear unsustainable debt bomb….!

      • lvent says:

        STOP RECYCLING THE FRAUD..!!!! THAT IS WHY THE ECONOMY SUCKS…!!!! STOP THE FRAUDCLOSURES!!!!

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