Federal Regulators Refuse to Reduce Principals
Lately even the White House has come to accept that principal reductions may be the only way to get many homeowners above water again. Owning about half of the country’s mortgages, Fannie Mae & Freddie Mac, along with the Federal Housing Finance Agency, are in the perfect position to make this possible – however they’ve abstained from joining several of the last few government aid programs and have voiced resistance to principal reductions. Without their cooperation, legislation may be necessary to make lenders accept reductions. And how is that likely to go?
Foreclosure Assistance Bill Dies in The House
“It is unthinkable that we could have used TARP funds for every major corporation, all of the banks, all of the ‘too big to fail’, and yet we would deny homeowners in the hardest-hit states some assistance…This whole industry has failed us, and we’re allowing homeowners to swim out there, alone, by themselves, with no help.” Rep Maxine Waters, D-CA
Voted mostly along party lines, the Aiding Those Facing Foreclosure Act of 2010 would have allowed TARP funds to be used on legal aid for homeowners, after finance lawyers working for Treasury decided that foreclosure relief funds were only for helping the banks doing the foreclosing.
Another reason this bill was created was that many public officials were contacted by lenders to encourage homeowners to not hire lawyers and depend on HAMP – and even as the bill in congress failed, attorneys general in Nevada and Arizona have now filed suit against Bank of America for their widespread bad faith in approving loan mods for their borrowers. Unfortunately, most federal agencies have shown less enthusiasm in confronting the megabanks.
FBI Can’t Find Anyone To Bust at Major Lenders
Last week’s Mortgage Fraud Summit in California was attended by someone who should have shown a great deal of knowledge in the subject – Sharon Ormsby, the chief of the FBI’s financial crimes division.
In the midst of a sea of presentations on the widespread fraud and incompetence of the world’s largest lenders presented by financial scholars and ruined homeowners, Orsmby touted the recent success of “Operation Stolen Dreams.” This investigation was mostly comprised of independent, small-time cases of mortgage fraud cobbled together into a “nationwide takedown.”
Ormsby refused to comment when asked if Bank of America was being investigated. When asked if CEOs and executives of banks making billions in profits off of mortgage fraud would see prosecution, she responded, “Where’s the proof?”
It may not seem like very good holiday news for many struggling homeowners, but as investigations into the foreclosure crisis develop in 2011, help for the masses may be on its way. However, now more than ever it is important that homeowners seek the help of experienced foreclosure assistance and fight back! Contact us for a free consultation…and have a Merry Christmas!