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One of the most underreported stories of the recent global financial meltdown was the role played in the crisis by housing giants Fannie Mae and Freddie Mac, and their subsequent and continued government bailout. To date, the federal government has purchased nearly $143 billion in stock in these two companies, with pending requests from Fannie Mae to Treasury to purchase an additional $1.5 billion and from Freddie Mac for $1.8 billion. This is fast approaching the combined government and Federal Reserve bailout of AIG. Once these transactions are completed, the American taxpayers will hold $150.2 billion in stock from these two companies. And, this is not expected to be the sum total of these efforts, as the Obama Administration stated in December of 2009 that it will extend an unlimited line of credit to these “too big to fail” behemoths for three more years.
So what do the American people get for investing $86 billion and owning an 80 percent share in Fannie Mae? Have many millions of homeowners who are delinquent on their Fannie mortgages been helped? Has Fannie devised a method or a path to prevent the estimated 13 million foreclosures that will occur over the next five years?
Unfortunately, Fannie has decided to go down a different, far less productive path. It recently announced that it will sue underwater homeowners who “strategically default” on their mortgage payments.
That’s right – Fannie is proposing to spend your taxpayer dollars to sue underwater homeowners.
A person facing foreclosure shouldn’t be threatened with taxpayer-funded lawsuits during one of the most difficult moments of his or her life. That is why I’ve written a letter with my colleagues, Reps. Marcy Kaptur (D-OH), Raul Grijalva (D-AZ), Steve Cohen (D-TN), Zoe Lofgren (D-CA), Barbara Lee (D-CA), and Mike Honda (D-CA), asking Secretary Geithner and FHFA Acting Director Demarco to exercise the federal government’s authority as Fannie Mae’s conservator to suspend the implementation of this policy until Fannie, the Administration, and the Congress, seriously consider the many problems associated with this policy and determine whether it conflicts with the Administration’s efforts to help keep homeowners in their homes.
The text of the letter is below:
August 31, 2010
The Honorable Timothy Geithner
Secretary
U.S. Department of the Treasury
1500 Pennsylvania Avenue, NW
Washington, D.C. 20220
The Honorable Edward Demarco
Acting Director
Federal Housing Finance Agency
1700 G Street, NW
4th Floor
Washington, D.C. 20552
Dear Secretary Geithner and Acting Director Demarco:
We are writing today to express our strong reservations about the policy announced by Fannie Mae to encourage its servicers to pursue deficiency judgments against “strategic defaulters.” We believe that this opaque, overbroad, and punitive policy, as conceived by Fannie Mae, is a poor use of taxpayer dollars and will unnecessarily include individuals who are not choosing to default on their mortgage. Furthermore, this policy is one of many which seems to run counter to the national need to stem the tide of foreclosures which are devastating communities across our nation. Mr. Secretary, as owner of 80 percent of Fannie Mae, we respectfully request that you work with Acting Director DeMarco of the Federal Housing Finance Agency (FHFA), Fannie Mae’s conservator, to use FHFA’s authority to require Fannie Mae to suspend indefinitely this new policy until the Administration and the Congress have reviewed the implications, including cost, transparency, utility, and oversight, of this new policy and determined if it is in the best interest of the American people to have Fannie Mae pursue such a policy.
At a time of record deficits and a nation crying for the government to get its finances in order, it is also unclear why Fannie Mae is proposing to use taxpayer dollars to pursue legal judgments against individuals who will lose or have lost their homes, have wrecked their credit rating, and likely have little or no remaining monetary assets. Treasury has already invested $86 billion into Fannie Mae and considering Fannie Mae’s dependence on federal dollars to exist and operate, we think pursuing expensive litigation against a vulnerable population when there appears to be little to no economic incentive is questionable at best.
The vagueness of this policy is also problematic. Under the proposed Fannie Mae policy, borrowers who are determined to have strategically defaulted on their mortgages will be subject to having deficiency judgments pursued against them in a court of law. However, it is unclear what transparent, objective criteria Fannie Mae is using to determine who is a strategic defaulter and who is not. Fannie Mae has also stated that an individual who pursues a mortgage modification in good faith will not be subjected to litigation. The problem with this aspect of the policy is that Fannie Mae has stated it will rely on the reports of its servicers to determine borrower intent. We have great concern with putting such faith in the servicers based on constituent feedback on the performance and objectivity of servicers based on their experiences, along with servicers’ evaluations by the Government Accountability Office (GAO), the Special Inspector General for the TARP (SIGTARP), and the Congressional Oversight Panel (COP).
For example, the GAO states, “The most common complaints involved the difficulty in reaching the servicers or not hearing back from them in a timely manner.” Furthermore, since the Treasury has yet to determine and implement metrics for assessing the servicers in terms of communicating with borrowers under the Making Homes Affordable Program, also know as HAMP, it is unclear that Fannie Mae would be able to rely on the servicers’ performance either. The SIGTARP has also found that “…this lack of consistent standards [among servicers] could mean that servicers are inconsistently applying criteria…” The GAO continues, “However, a lack of specific guidelines has also led to significant variations in servicers’ quality assurance programs.”
Given the fact that Fannie Mae is the administrator of HAMP, and the above are just a small set of criticisms of HAMP, it is unclear that Fannie Mae could properly implement this new policy consistently against “strategic defaulters.”
We request that the following questions be thoroughly and clearly answered by Fannie Mae and FHFA, and then the answers considered by the Administration and the Congress before Fannie Mae considers moving ahead with this questionable policy. These questions include:
• How much is this policy expected to cost Fannie Mae and the oversight agency to implement?
• Is this an appropriate use of taxpayer dollars, and if so, why?
• What effect will this policy have on the future of our nation’s housing market?
• Is this policy consistent with the Obama Administration’s foreclosure mitigation efforts?
• How much of the money returned to Fannie Mae from said lawsuits will be paid to the Treasury, and how much will go to the investors, and how were these percentages determined?
• How many lawsuits and in what states does Fannie Mae expect to pursue deficiency judgments?
• What are the clear, objective criteria for determining who is a strategic defaulter and who is not? Who worked to determine these criteria (names, position, corporation or agency for which each person works)?
• What agency will conduct the oversight of this policy, especially in regard to the servicers?
• How often will Fannie Mae and the agency conducting oversight assess the process and implementation of this policy by the servicers and what are the criteria of this assessment?
• What concrete, recordable attempts will be made to engage the borrower prior to a delinquency judgment being filed to resolve the situation prior to litigation?
• How much investor input was considered when creating this policy? Please include related documents and detailed summaries of meetings and conversations in which the investors gave input, as well as copies of emails.
• What evaluations and tests did FHFA use to determine the effectiveness and efficiency of this policy? Who completed these evaluations and tests? Please include the raw data from the evaluations and tests, as well as the models and processes used to analyze the data, as well as the conclusions of the analysis.
• What process was implemented at FHFA for approval of this policy? Who at FHFA was involved in the approval process?
Given the challenges, concerns, and questions raised by this policy, we believe that you should act with all deliberate speed to suspend the implementation of this program, initiate a comprehensive review its procedures and aims, and ensure that Fannie Mae answers thoroughly and clearly the above questions so that both the Administration and the Congress can review and work with the Treasury and FHFA to ensure that taxpayers’ dollars are spent wisely.
Sincerely,
Rep. John Conyers
Rep. Marcy Kaptur
Rep. Raul Grijalva
Rep. Steve Cohen
Rep. Zoe Lofgren
Rep. Barbara Lee
Rep. Michael M. Honda
cc: The Honorable Shaun Donovan, Secretary of Housing and Urban Development
cc: The Honorable Neil Barofsky, Special Inspector General for the TARP
cc: Michael J. Williams, President and Chief Executive Officer, Fannie Mae
54 Comments
Thanks for your post, Rep. Conyers.
I’d like to see a lot more pressure on Secretary Geithner on this issue — but also on his role at large. He doesn’t seem to realize that his job is not to protect the interests of banks and GSEs, but to help the American public through a secure economy.
I don’t understand this part:
“At a time of record deficits and a nation crying for the government to get its finances in order, it is also unclear why Fannie Mae is proposing to use taxpayer dollars to pursue legal judgments against individuals who will lose or have lost their homes, have wrecked their credit rating, and likely have little or no remaining monetary assets” (emphasis added)
Were Fannie and Freddie even suing judgment proof mortgagors? I agree that it makes no sense to chase defaulting mortgagors who have no reachable assets, but I doubt that that was ever happening. Who would ever pay a lawyer to sue someone with no money?
I still think that deficiency judgments against mortgagors with significant non-exempt assets makes sense. I don’t even think this is conservative/progressive issue, if you have enough assets to justify the expenses of a lawsuit, you have enough assets to continue to pay your legal obligations.
This isn’t about poor unemployed people or those facing medical bankruptcy. If you have no money, a lawsuit isn’t a problem anyways, all states have statutory exemptions that prevent creditors from seizing certain assets (usually including something like $240/week in income).
This is about homeowners who have the thousands of dollars worth of non-exempt assets needed to make a deficiency suit cost-effective, who choose not to pay their recourse mortgage. I don’t see the progressive angle there, I would think that all taxpayers, who are apparently implicit guarantors of Fannie and Freddie, would want to see the GSE’s recoup as much of the bad debt as possible.
What am I missing here?
Link please.
What I do NOT understand is why we are not holding the banks accountable to the law. There violated TILA and RESPA laws in the way they foreclosed on many, many people by doing things like 1) relaying all calls to a voice message system and not returning calls while simultaneously urging the home owner to contact the company for a work out plan. (homecomings financial and I have the documentation and A.G in my state fined them-they kept it up despite the fine) 2) charging fees for things like property inspection, to cash checks electronically, and various miscellaneous fees that they refuse to explain. These fees are stacked up while in foreclosure and while they refuse your calls. 3) telling people to quit paying their payments so they can get into the HAMP program. This happened to a good friend of mine and once she quit her payments it ruined her credit and they refused her in the program. 4) escrow account problems, forced insurance scams 5) foreclosure prevention companies that would NOT exist if the banks were actually communicating with people while in foreclosure. (these are likely owned by the banks).
Laws were broken as they foreclosed on people. It reminds me a bit of raping the drunk girl at a party, or raping a prostitute. (Just replace drunk girl or prostitute with “poor person”.) In this country if you are poor you pay more…and this is wrong. Worst of all, it appears that crime doesn’t count unless it is crime against someone who has money or power.
All I want is for the government to look into the process behind these foreclosures and to hold the banks accountable for their violations of law and the fact that the banks may have been increasing the likelihood of foreclosure by their actions.
Please help the American people fend themselves against these corporate thieves. Just make them follow the laws.
Thank you for all your work on this issue,
Katie Jensen
Yes, thank you for that. I’ve heard from former employees of foreclosure services firms who told me they regularly saw RESPA violations. I’m a member of a class action suit against one of the biggest banks for RESPA violations.
And yet in spite of the systemic nature of these violations by the industry, the best we could ever hope for is a HUD action in which the offenders get a mild slap on the hands in the form of a fine. This isn’t just a series of accidental boo-boos; it’s deliberate, repeated and looks a lot more like an attempt to defraud.
Come on congressman Conyers, but what are you really doing about it ?
writing a letter is a cop out….surely there is something more substantial you can do.
Seems like more Kabuki to me folks.
Rep. Conyers: Thank you for your letter and for your service.
I would kindly suggest that you amend your remarks by calling for the resignations of both Timothy Geithner and Larry Summers. Both of these individuals have proven beyond any doubt where their loyalties lie, and quite clearly such allegiances do not favor the millions of average, hard-working (if employed) Americans across the country who are struggling under the weight of a depressed economy each and every day of their lives.
Thank you again, Sir.
This is great imagine how much homeowners will spend in our economy if they don’t have to pay for houses that are not worth now or in the near future what they paid for them.
Do you have any numbers for how much they will spend?
Shorter version why waste government tax dollars suing people with no money? Why force people out of their homes when putting more homes on the real estate market will only drive home prices further down?
Does Geithner have any numbers about how much it costs the government to sue people and how much he expects in this economy to recover?
A 6 month holiday from homepayments would help them keep their homes and spur consumer spending.
Seconded!
Yes investigations now!
I agree, I think. Fannie and Freddie pursuing strategic defaulters is necessary to their function and we can complain about it, but we are all paying into that till. I think Conyers’ criticism is a lot stronger concerning 1) how ‘strategic default’ will be defined, and 2) the lack of trust that Americans have in servicers to be part of this process.
In this area, we do need to realize that it should now be a major concern of ours that at every level of the housing market, we are no longer relying on the parties and policies that inflated the bubble to guide us in the future. Geithner’s policy doesn’t go far enough to protect us from something we know to be a problem.
In this, it’s like bonuses on Wall Street paid out of taxpayer dollars. The reason that finance aces make those bonuses is because they made money for someone; the reason that we would ever tolerate taxpayer-funded businesses to do the same would be because we believed that we are not just paying for rare and expensive expertise in making money at others’ expense, but rare and expensive expertise in ensuring economic stability.
The servicers Conyers mentioned, like Wall Street bigwigs, have proven that not only are they devoid of such expertise as would make them a public benefit, they have no interest (in any sense) in pursuing such expertise. So yeah, while the goal here isn’t bad in and of itself, the announced policy needs to be questioned, and reliance on servicers to help make these calls has to be monitored and restricted from the outset.
Tim Geithner ; Maiden Lane
fyi – a reminder of David Dayen’s NACA post yesterday
this org appears to be actually helping families facing foreclosure
Technical difficulties
Could not have put it better. Geithner, Summers, and others continue to confuse the two, even after overlooking the difference cost us almost the entire American economy.
Maybe you can point out to the IDIOTS in the White House that it is moves like this that have Progressives so completely turned off.
They don’t care. They think they are saving themselves with the presidential “war” speech last night and the negotiations between I and P. They are fools.
I was making an argument. As explained in my post, I doubt that Fannie/Freddie were pursuing claims against judgment proof debtors, simply because it is a waste of time and money. If you have sufficient income/assets to justify the time and expense of a deficiency claim, and you default on your mortgage, it is because you are selectively choosing to do so.
As for knowing that the loans are recourse, they have to be recourse loans in order for the mortgagee to seek a deficiency judgment.
I have to say that I’m as skeptical of the argument that there’s no money to be made for servicers in broadly defining strategic defaulters under this policy as I am of the argument that there’s no money to be made in selling mortgages to people who can’t make payments. The way you make money is by lying to everyone while the government covers your tracks, believing that it’s in the national interest.
…although it turns out you weren’t replying to me, so maybe you agree.
This is news to me. Talk about a bad use of taxpayer dollars. Thanks to Rep. Conyers for bringing the issue to people’s attention.
Yeah, if the definition of Strategic Defaulter is drafted to include defaulters with very little income/assets, then it’s obviously a waste of time and money. I just doubt that the GSE’s would be interested in obtaining a worthless judgment, for pragmatic reasons.
Funny…throw in a couple of “bring it ons” and a few mispronounced words and that could have been a Bush speech as far as I’m concerned.
I guess I just don’t see where the money would come from.
So you get your deficiency judgment against an unemployed guy with no assets and other credit card/medical debt. There’s no assets to seize, no wages to garnish, and if the guy ever declares bankruptcy, your unsecured claim gets wiped out.
It would be nice…but please don’t hold your breath….these are the Democrats…it’s the WH’s policies,I am sure nothing is going to be done about it.
Congressman Conyers is doing what almost all politicians do…pretend that they are going to do something……remember,there is an election coming.
Who would ever sign people up for mortgages they know are certain to fail?
Sometimes its not about the end result, but rather tha vampiric feeding that happens along the way.
Dunno if thats the case here, but it wouldnt be surprising if they figured some way to make money off the process, regardless if they ever recover money. It could be something as simple as getting to count the mortgage amount as fully paid/solvent on certain ledgers until the legal action officially fails.
This could just be another example of “extend and pretend”.
What nobody seems to be addressing is that Fannie Mae is just another organization that has long since stopped caring what anybody but banks, credit bureaus and wealthy investors think about them. They are in business to make themselves and a select few other people rich. And why not do it on the taxpayer dime? That seems to be the policy of this White House just as it was for the previous White House. And the one before that, and the one before that and the one before that. Soon the middle class will consist only of civil servants.
That’s a darn good question but two words come to my mind: Debtors’ Prison. How long until we are forced to work off debt to save the private sector even more money? And those private jobs will be lost, creating more debtors for the work houses. And so on and so forth. It’s a win-win! (For the top one or two percent and really who cares about anybody else?)
The whole situation will be nasty if it’s not handled well, is my concern. The government buys tons of mortgage debt to ease turbulence; the government promotes forgiveness of debt to keep people in homes; the government’s agencies sit down with servicers to determine who the government will pay to sue in a housing market where walking away is in the interest of countless homeowners.
These aren’t normal functions like issuing food stamps while investigating to prevent fraud. These are extraordinary measures taken in a crisis and unless they’re all coordinated to the benefit of the public, they will work, by default, to the benefit of wealthy swindlers who offer themselves as the only people who can make the tough calls. That’s what the crisis showed us, in fact, and we ignore that lesson at our (very real) peril. So I’m glad Conyers and Co. are holding up a warning sign.
Blue Texan’s regularly scheduled post is now available: While Tea Party Candidate Joe Miller Complains about Federal Government, Alaska Swims in Federal Dollars
Isn’t that the truth? More fraud perpetrated on American consumers, and those criminals want their loot ignored but future losses covered!
This economic system needs to be reformed. It’s riddled with leprosy-like malfeasance.
TCU nails it:
Way to go Rep Conyers! I agree with this completely.
True that someone has to take the hit, but foreclosed homeowners ought not be get hit with yet another set back. Kind of like piling on.
I would say that if by ‘strategicaly default” you mean people who bought a house, have been making the payments, and default only because the house is underwater and they think they can get the same kind of house for less by buying a different house–then, to me that’s dishonest.
If the person can’t make the payments and suffers foreclosure, that’s one thing. But, if the person can make the payments and is only trying to dump his bad investment on someone else so he can get something cheaper, that’s not good.
That is someone pushing off their bad deal onto the taxpayers (since we own Fannie Mae), i.e., the rest of us. They decided to buy it. They could afford it, so no one pushed them into something they couldn’t afford.
In my book, that’s pretty dishonest.
Been thinking about this bit:
I think that part of the reason the GSEs were supposed to be the ultimate backstop was to help ease pressure on the banks. We could handle the write-down as the American public, but the banks couldn’t — that’s why they have been resisting any efforts at cramdown. But at some point we have to realize that the housing market was inflated, that the market has deflated, and we have to realize the losses. Individuals who already have been pushed to the limit financially cannot bear the loss; the country as a whole can in the aggregate as the ultimate backstop through our GSEs.
Until we finally get cramdown and a reset of market prices, we’re going to remain in this dynamic tension between the financial industry which don’t want losses and homeowners who can afford them even less.
Once upon a time Rahm Israel Emanuel was a director of Fannie Mae (1990s) and made a lot of money. Now he is running WH. Think of his future fortune.
I was part of three class action laws suits since my night mare with Homecomings financial now GMAC. Two law suits were thrown out on technicalities. (one in New York and one in California) The last one originated in MN but crazy as it is, Homecomings went bankrupt. Once Homecomings went bankrupt and became GMAC, the lawsuit was sacked. I don’t understand exactly the nature of the governments relationship with GMAC but something funky has been going. We bailed them out, took over ownership and they continue to violate TILA and RESPA laws. Nothing has stopped them. They refuse to participate in an honorable way with HAMPS program as well. I would love to see a class action soon make it all the way but each one has been shut down and each of these suits centered on the fees, and the RESPA violations.
Seems like a 30% tax on high frequency transactions would come in handy about now.
I don’t understand ignoring potential revenue streams from the finance games.
No one should be put out with out investigations in to the procedures used. I don’t think people understand that payments have not been applied properly, balances may be incorrect. In my very republican state, MERS had my loan but my state made it clear through a lawsuit against MERS that MERS indeed has a right to foreclose and that they do not have to produce documentation because in the State of Ne they are not a bank but a representative of a bank. Some corporate head was thinking to the future when they produced this lawsuit. It basically meant that regardless of the accounting errors by MERS, even if they can’t produce the proper documentation, they can foreclose. Something has to be done. At every level the corporation are trying to keep a lid on the illegal behavior. It was out and out fraud. Lots of poor people lost their homes due to fraud. Until the investigation begins there should be a complete moratorium on foreclosures. The whole story has not been told. I would be willing to bet that accounting errors and illegal fees are part of well over 50% of these foreclosures.
I think they also found a way to make more money from the foreclosures than they do from simple interest on a 30 year loan. They collect these fees up front many times as people throw money trying to save the loan. It pads the bottom line for these banks. Then they bet against these loans with PMI insurance and investments that basically allowed them to recoup and make money off of the losses. I also think the banks were behind the foreclosure help scams. They knew if they refused to talk to folks for the 6 months leading up to foreclosure, they could pile on the fees, no one would know in advance what their balance was, and they would be desperate for help. These foreclosure scams would charge 1000 to 1500. Well that’s about affordable when your lender won’t take your house payment at all. No one has investigated a possible connection. There are sooooo many areas of this that America has turned a blind eye to…because it was people with inferior credit to begin with. The country has since the beginning bought the banker and finance line that these people just shouldn’t have had loans. Well, I say…not so fast. I have a feeling that this accounts for a percentage of the problem, but fraud…I am betting (because I have googled mortgage fraud and seen complaint after complaint about pay off amounts being bogus, about escrow account violations, about forced insurance, about forced fees, about out right accounting fraud.) This is no small problem, it’s just that many people don’t realize that they have been violated. My friend who was told to stop paying her loan didn’t have a clue that this was wrong. She just ended up selling her house, losing money, destroying her credit and moved in with her fiance. Lots of folks have no clue about TILA And RESPA laws.
How many people know that they are not allowed to shut down communication while in foreclosure. This is a respa violation. How many people know that if they don’t give your a payment history when you request it, it’s a TILA violation. They don’t give you the payment history because they will NOT account for the fees. People who are used to the credit card scams or who have never owned a house have no idea because it fits with the crap they pull with pay day loans, and credit cards.
Obama bailed out criminals…and he is doing nothing to stop their illegal behavior. Many people don’t know this, but they sure as hell know how uncomfortable life is.
Well Congressman Conyers should also write another letter with the heading: WTF Is Going On???
Here in my hell hole I’ve been researching and following HUD and Fannie/Freddie and as far as Fannie screwing thems that “walk away” their also screwing “we the people/stockholders”.
Example: Property was purchased in May ’06 for $76,320, first time home buyer takes a mortgage for $72,504. Defaults and the row house is sold at auction in Oct ’09 to, wait for it, Fannie Mae for: $85,000! just under $9 thousand MORE than the inflated ’06 price. So how’s that turn out for the stockholders – you and me? We through Fannie just sold our purchase last month for: $SIX THOUSAND a loss of $79,000.
From what I’ve been finding, this happens a lot. Where’s Holder investigating HUD/FannieFreddie? As you know that is looking backward and something only the Professional Left seems want to do.
We.Are.So.Screwed.
So foreclosure without having to prove that you’re actually owed anything – that’s absolutely disgusting. Hell, I wish I could sue Goldman Sachs for what they might possibly owe me. Documenting my claims? Don’t look at me! What reason would I have to keep such things around?
Did Fannie hold the mortgage? If they were just credit bidding the loan (and a 72k loan could grow to 85k with interest and penalties), then they weren’t really paying any money.
I am having to sue them for my payment history. We have requested twice, through my lawyer. Documented. This is a TILA violation. They must give you your payment history. Nada. I think they will have trouble finding it because the loan company changed so many times AND the servicer was MERS. They can foreclose without proper paperwork but if I sue for the paper work GMAC has to produce it.
Wording from the deed:
(sold) at public auction on October 15, 2009 to the highest bidder for cash at which sale Federal National Mortgage Association became the purchaser of the property for the sum of $85,000, that being the highest bid.
….the party of the First Part grant and convey unto Federal(NMA), party of the Second Part, with Special Warranty of Title, all the following described property….
Affidavit of Consideration and intake sheet confirm the purchase price and Grantee.
It might be worth something someday, but it does have an immediate deterrent effect on anyone else considering walking away. Could be that the answer is, “pour encourager les autres” (to encourage the others)
Thank you Rayne, I don’t get why people don’t see this. Some people live in recourse states. If you don’t have a dollar left, a judgment will effect your credit, your taxes and then, try to rent a home. Right now I can’t refinance out of a 15 year mortgage to a 30 which would take up the slack because my house is now worth less than I owe.($30,00.00) I’m talking about a home worth 103,00.00 now, that was appraised at 170,00.00 during the “boom”. I owe 88,00.00 on the first mortgage and 40,00.00 on the second. Which I took out the second to take of both of my parents, one with colon cancer and COPD and the other with Parkinson’s. I was their only care giver for 12 years. I don’t think I was gaming the system to want to refinance to a 30. My home is worth so little I’m going to lose it after living here 22 years. Trying to give an argument, you can’t squeeze a turnip, doesn’t apply anymore. Suing people that now have on money now, may not come out in money, but in how you will live the rest of you’re life.
Correction, suing people that now have “No” money.
And that’s another thing I refinanced in 2003 to get a lower interest rate and my loan changed hands so many times. I don’t know who I paid to. I looked at papers we have and it went through 5 people before Chase finally “has” it. One time I made a payment and received a letter to pay another company, in less than a month. I don’t know who to pay.
I’m afraid to get into HAMP.
Yes, exactly. Some of these foreclosure services firms — including one of the largest ones in Rep. Conyers’ home state — are “preferred service providers” of Fannie/Freddie. These firms have wined and dined the GSEs’ management, signed agreements through which the firms take on a substantial portion of the mortgage management process, and then they do the actual foreclosures.
As you well know, the homeowner is cut off by these service providers from the lender and not allowed to renegotiate once the foreclosure service provider has begun proceedings. The fees charged average $4,000 per foreclosure, and the service firm is the one handling the suit. They get their money either from the homeowner or from the GSE; sometimes they actually have real estate subsidiaries that purchase the properties at short sale at sheriff’s auctions and then turn around and flip the property at a higher price to make a profit.
(Again, I’m positive this is going on in Michigan. I have access to audio and notes from former employees who explained all of this.)
Some of the money probably does go back to the GSEs, but who knows how much? You can be certain the foreclosure services firms are keeping the lion’s share, calling much of it “attorneys’ fees” without explaining to the foreclosed who the attorneys are, letting the foreclosed have access to the attorneys in question.
(And then add MERS to the mix — it’s a nightmare.)
Thanks, Rep. Conyers!
Your voice in this matter is much appreciated. Frankly, I feel that it’s absurd that a government owned entity is allowed to behave in a predatory manner. Sec Geithner needs to be held to account for this and for HAMP’s nightmarish track record.
Defaults on owner occupied homes should not be pursued with lawsuits beyond forclosure. And in many cases I don’t even think there should be a forclosure. But that’s a case by case judgement which would need to be settled by the courts.
Ultimately, court ordered cramdowns was the best way to cope with the housing crisis but Congress and the Administration failed to implement the proposed cramdown measures.
That’s exactly What Bush, Obama, Geithner, Bernanke, and Summers did to the rest of us. If I had a mortgage I would walk just on principle, regardless of who owned it. Further, Fannie and Freddie’s loans are NOT guaranteed by the government, and that is in writing. There is no hit on ANY taxpayer for those loans, except that our banker infested government chooses it.
“Although we are a corporation chartered by the U.S. Congress, and although our conservator is a U.S. government agency and Treasury owns our senior preferred stock and a warrant to purchase our common stock, the U.S. government does not guarantee, directly or indirectly, our securities or other obligations. ”
http://seekingalpha.com/article/171815-the-fed-and-fannie-mae-throwing-money-down-a-black-hole
I would like to see some action here, Mr Conyers, not a letter.
Agreed. It’s not good enough anymore to just complain here or dailykos or anywhere else. You and your fellow dems control the congress and white house. The repubs have done far more with far less power.
If you and the dems can’t get it done then why be surprised that many of you are in trouble for re-election.
I am so bored with the dems resorting to complaining when they can actually do something IF they really mean it!
Donald Trump declares bankruptcy on a $600 million property, and nobody goes after him.
You allow them to foreclose on your double-wide and the feds are there to take your truck?
If Obama truly cares about the Democratic party and his relection in 2012, he will dismiss Emmanuel, Geithner, Summers, and Gibbs. Now.
Can Obama hit a homeowner underwater with a cruise missile?