California Attorney General Kamala Harris has called on the government-sponsored enterprises (GSEs) to institute a ‘good faith pause on foreclosure sales in California’ while the federal government enacts a ‘thorough, transparent analysis’ of the possibility of writing down the debt on homeowners with underwater mortgages.
The Bay Citizen reports that Harris made her request in a letter to Federal Housing Finance Agency (FHFA) Acting Director Edward DeMarco. Mortgages owned by the GSEs were not included in the Feb. 9 settlement between the nation's five major banks and federal and state government agencies. Fannie Mae and Freddie Mac own more than 60% of California's residential mortgages, but both the GSEs and the FHFA have been publicly cold to the notion of assisting underwater borrowers with loan modification assistance.
‘As ground zero for this mortgage and foreclosure crisis, California's underwater homeowners deserve a straight-forward analysis from FHFA of whether a program of principal reduction by Fannie Mae will provide significant assistance to struggling homeowners as well as save taxpayer dollars,’ Harris wrote.