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Posted by on Feb 27, 2012 in Principal Reductions | 8 comments | Print Print

Insisting on Principal Reductions

From the latimes.com:

California’s attorney general has asked for a suspension of foreclosures on loans controlled by Fannie Mae and Freddie Mac.

Atty. Gen. Kamala D. Harris in a letter asked the regulator of the government-controlled mortgage titans to halt foreclosures in California until the agency has completed a “thorough, transparent analysis of whether principal reduction is in the best interests of struggling homeowners as well as taxpayers.”

It is not the first time that Harris has tangled with the giants — last year she sued the two mortgage giants after they refused to answer subpoenas regarding their mortgage and foreclosure practices. That case remains pending.

Harris has also called on Edward DeMarco, the head of the Federal Housing Finance Agency that regulates Fannie and Freddie, to step down, accusing him of not doing enough for borrowers.

Harris’ request for a foreclosure pause comes on the heels of a multistate mortgage settlement that will require the nation’s largest mortgage servicers to reduce principal for certain borrowers. California has secured $12 billion in principal reduction and short sales from those banks, but Fannie and Freddie are not part of that deal.

Harris’ office sees the two giants as key to getting the housing market back on track, estimating that more than 60% of outstanding loans in the Golden State are controlled by them. But DeMarco has resisted principal reductions, which is the writing-down of mortgages of borrowers, arguing that the results of those reductions are not worth the costs.

The FHFA has overseen Fannie and Freddie since the two mortgage giants were placed under government control in 2008 as the financial crisis picked up steam. Calls to the agency were not returned.

8 Comments

  1. That “settlement” was just another sell out for the benefit of the banks.

    http://news.businessweek.com/article.asp?documentKey=1376-M004XJ0YHQ0X01-61JFJUH5O1MQKDUEORG6DQNARK

    You can’t make this stuff up….

    http://www.bloomberg.com/news/2012-02-27/buffett-says-banks-victimized-by-evicted-homeowners-who-emerged-as-winners.html

    Looks like Kamala is grandstanding as she signed off on this piece of garbage…..

    http://online.wsj.com/article/SB10001424052970204795304577221642161465340.html

  2. In a world with less ignorant journalists the headline might be “Attorney General insists that pensioners, retirees, and taxpayers pay so borrowers can stay in homes they can’t afford.”

  3. I’m so happy that my taxes can be used to benefit irresponsible CA home owners. Nothing is more fun than donating money to people wealthier than I am.

  4. Do I get a principle reduction too? Or are we just talking about wealth transfer again? I make my payments.

  5. “Do I get a principle reduction too? Or are we just talking about wealth transfer again? I make my payments.”

    You must be rich and/or a small business gringo…

    If you don’t like social engineering/electorate pandering, just wait until the next round of fun!

  6. “3.In a world with less ignorant journalists the headline might be “Attorney General insists that pensioners, retirees, and taxpayers pay so borrowers can stay in homes they can’t afford.”

    lgs”

    Grand Slam.

    ADD: (Dispicable fraud) before Attorney General and ADD: (please, please re-elet ME and my equally ugly and dishonest crew grandma) after afford.

    then Perfection.

  7. @ lgs, excellent summary.

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