Advocates Applaud California Congressional Delegation’s Call for Investigation into FHFA’s Lobbying Efforts Against the Homeowner Bill of Rights

Advocates Applaud California Congressional Delegation’s Call for Investigation into FHFA’s Lobbying Efforts Against the Homeowner Bill of Rights

May 30, 2012– Fourteen members of the California Congressional Delegation sent a letter to the Federal Housing Finance Agency blasting its involvement and opposition to key pieces of the Homeowner Bill of Rights package being considered in Sacramento.

The California Reinvestment Coalition and Tenants Together applaud the leadership of the California Congressional Delegation on this matter. The Homeowner Bill of Rights package introduced by Attorney General Kamala Harris, intends to protect homeowners and tenants from the egregious and unlawful practices that banks have made well-known among our communities. FHFA’s unsolicited sojourn into California’s legislative affairs is shameful, yet expected. FHFA’s refusal to allow principal reduction on Fannie Mae and Freddie Mac loans, support for the “dual track” problem, and weak tenant protection policies has drawn the ire of homeowners, tenants, advocates, and policymakers. Earlier this year, 97 organizations signed onto a CRC letter demanding that FHFA Director Ed DeMarco make these important policy changes or resign his post.

On May 11, the Federal Housing Finance Agency (FHFA)– the government agency charged with overseeing Fannie Mae and Freddie Mac—sent an unsolicited letter to the Members of the California State Legislative Conference Committee who are considering bills intended to prevent foreclosures and create strong protections for California homeowners and tenants. In the letter, FHFA defined a number of the provisions in the bills as “overly broad”, “disproportionate to the perceived problem”, “punitive” of banks, and “increasing legal risks for lenders and investors”. The Agency laid out its critiques without any substantial analysis of the scope of the problem in California, and sounded more like a letter from the banking industry than from an independent regulator charged with helping homeowners and “serving the public interest”.

Today’s letter from the California Congressional Delegation showed support for California’s homeowners and tenants, and urged independence in the legislative affairs of the state. The Delegation called for an investigation of FHFA’s lobbying activities and blasted their lack of expertise of California state legislation. The letter states, “[FHFA’s] letter…demonstrates a clear bias toward the lending industry’s preferred position. Such advocacy on behalf of a private industry, particularly in a matter related to existing state law, is a very questionable activity for an independent federal regulatory agency to undertake, let alone one with an expressed mandate to act in a manner consistent with the public interest.”

The California Reinvestment Coalition and Tenants Together support the California Congressional Delegation call for an investigation of FHFA’s lobbying activities. Nearly 671,000 California families are currently at risk of losing their homes. FHFA’s letter presents the foreclosure process in California as going smoothly, but California homeowners, tenants, and advocates unequivocally disagree. The recent $26 billion National Mortgage Settlement is just one of the many examples that make the case against FHFA’s optimism.

Our state legislature is considering important pieces of legislation that would give homeowners a full and fair chance to renegotiate their loans and prevent more foreclosures and evictions in our hard-hit state. The Legislative Conference Committee is considering important protections for Californians that include:

  • Substantial restrictions on “dual track”, including a requirement that borrowers who apply for a loan modification in the first 120 days of delinquency get a yes or no determination before the foreclosure process commences; and borrowers who apply for a loan modification after the foreclosure process begins should have the opportunity to have their application considered before the foreclosure process continues. In cases where banks fail to follow these simple procedures, homeowners should have the opportunity to remain in or get back their homes.
  • Procedural reforms requiring servicers to provide borrowers with ample evidence of the servicer’s right to bring foreclosure actions, including the original note and mortgage, and evidence of chain of title.
  • Stronger protections for tenants living in foreclosed properties, including provisions for banks to honor leases, and provide at least 90 days notice to tenants without a lease.

CRC and Tenants Together support the immediate enactment of these reforms in California statutes. Instead of impeding the efforts to protect homeowners and tenants, the Federal Housing Finance Agency should stop sounding like the banking industry and immediately enact these same policies at Fannie Mae and Freddie Mac.

California Reinvestment Coalition
Tenants Together

Copies of letters below…



May 30 2012 Cdcd Fhfa Mortg Lobbying Letter

fhfa letter

2 Responses to “Advocates Applaud California Congressional Delegation’s Call for Investigation into FHFA’s Lobbying Efforts Against the Homeowner Bill of Rights”
  1. Hell NO! No More Bankster Bailouts! says:

    CA homeowners need changes to the state laws to curb judicial rulings that leave all homeowners at risk of having a servicer or a debt collector usurp the position of a defunct lender or a named lender that was totally fictitious.

    Certain of the CA judicial rulings have now prevented the homeowners from establishing if the entity foreclosing is really the proper party.. In many cases, the public records show breaks in the chain of title. This clouds title. But the current standards on foreclosure defense, based on current state law have caused serious problems for homeowners trying to protect themselves from having their mortgage ‘hijacked’ and foreclosed upon by a stranger to the contract.

    Servicers are creating documents that benefit themselves. They are still unchecked and unregulated.

    My mortgage names the LENDER as a NY CORPORATION but the specific CORPORATION did NOT EXIST. That means there are no MERS resolutions for this ‘corporation’. But because MERS was drafted on the DOT, another corporation that was NOT NAMED in ANY of the loan origination process got the MIN numbers for the loans.

    There is no proper connection between these loans and MERS, regardless of the fact that MERS was named as the ‘nominee’ and ‘beneficiary’.

    The loans also indicate that the LENDER is to name any Substitute Trustee. Of course, what is occurring is the SERVICER uses MERS to name a SOT, regardless of the contract.

    State laws need to be strengthened to prevent VOID CONTRACTS such as mine from being used to foreclose. [I’ve been told that a million loans were originated in the name of this corporation that did not exist, over a number of years – that is evidence it was not just a ‘mistake’. Court cases had been lost where that fake corporation tried to foreclose in it’s own name in CT before the date of my own loan origination. There was a financial advantage in naming the fake corporation as the ‘lender’ apparently.]

    CA needs to PASS Kamala’s bill as is. It is NEEDED.

  2. California homeowners need to be given permanent principal reductions based on the decreased value of their property.. The banks also need to be punished for not following guidelines that they agreed to participate in. I’m sick of reading how they got government bailouts and then gave themselves multimillion dollar bonuses.
    Meanwhile as the deficit increases my pay has decreased thanks to the banks damaging our economy. My home has also decreased 50% while I’ve been trying for 4 years to get a modification. “I’m sorry, we can’t find your paperwork.’ or “We need a new profit and loss or something…” I’VE HELPED THE BANKS, NOW MAKE THEM HELP ME.

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