Yesterday, the Minneapolis, Minnesota City Council approved an amendment to its fiscal year 2013 Federal Agenda, calling on the Federal Housing Finance Agency (FHFA) to establish a principal reduction program for Fannie Mae and Freddie Mac owned or insured rental mortgages.
|By: Phoenix Woman Saturday August 4, 2012 6:45 am|
|By: David Dayen Friday August 3, 2012 3:15 pm|
Matt Stoller has a superlative article today in Salon picking up on a central frustration of everyone trying to decipher housing policy. The truth is that the data is truly terrible. We have a vague idea of the number of mortgages and foreclosures, and we can identify trends. But in reality, there is no central, comprehensive, reliable number on these metrics and that makes it impossible to create decent housing policy.
|By: David Dayen Thursday August 2, 2012 6:45 am|
The letter from Bank of America Home Loans got right to the point. “We are pleased to inform you that we have approved your Home Equity Account for participation in a principal forgiveness program offered as a result of the Department of Justice and State Attorneys General global settlement with major mortgage servicers.” In the letter, which I obtained from an anti-foreclosure activist, Bank of America offered the homeowner full forgiveness of their entire home equity loan balance of over $177,000. But then Paragraph 5 came with an ominous warning: “Please be aware that we are required to report the amount of your cancelled principal debt to the Internal Revenue Service.”
|By: David Dayen Wednesday August 1, 2012 6:50 am|
When Ed DeMarco rejected participation for Fannie Mae and Freddie Mac in the HAMP principal reduction program, condemnation on the left was fast and furious. But the statute is a bit unclear, and no matter, what Ed Marco may be a convenient villain for an Administration that has done little to solve the housing problem over three years.
|By: Jon Walker Tuesday July 31, 2012 1:45 pm|
President Obama wants to try principal reduction as a way to help home owners and the economy, but the acting director of the Federal Housing Finance Agency, which would be responsible for implementing a key part of this policy, doesn’t like principal reduction. As acting director of FHFA, DeMarco has decided that gives him the right to set government policy based on his personal preferences. The illustrates how important it is for an administration to get it’s own people in place.
|By: David Dayen Tuesday July 31, 2012 1:15 pm|
I was wondering whether FHFA Acting Director Ed DeMarco would respond to that Wall Street Journal article today pressuring him to allow participation from Fannie Mae and Freddie Mac in an Administration principal reduction program. Well, he has. DeMarco rejected participation for Fannie and Freddie, opting to go ahead with principal forbearance and other loan modification programs and blocking principal reduction.
|By: David Dayen Tuesday July 31, 2012 7:25 am|
FHFA leader Ed DeMarco has indefinitely put on hold the question of whether he will allow Fannie Mae and Freddie Mac to offer principal reductions to delinquent underwater borrowers. He’s actually said nothing about it publicly since April. But Nick Timiraos leaks out the details of a new study that shows the benefits of principal reductions are greater than FHFA first surmised.
|By: David Dayen Sunday May 13, 2012 7:00 pm|
The design of HARP 2.0 has artificially profited banks at the expense of homeowners. The banks, in a very strange and apparently coordinated manner, have unilaterally decided that they will only perform HARP refis for underwater borrowers on the loans they already service. This eliminates competition for those loans. And the immediate effect of that is higher costs for underwater borrowers, who are trapped and cannot get a refi with anyone but their old servicer. So the servicers raise the interest rates they offer on the refi. In some documented cases, the closing costs, which are almost entirely profit for the bank, are higher than the savings on the refinance.
|By: David Dayen Monday April 16, 2012 9:20 am|
Good columnists like Edward Luce are explaining some of the basics of the ongoing housing/mortgage crisis, but they’re still assuming that the decisions open to Ed DeMarco will have a greater effect than is being discussed. That’s because his decisions about principal write downs would apply only to a small part of the overall depressed housing market.
|By: David Dayen Wednesday April 11, 2012 10:10 am|
Coverage of Ed DeMarco’s speech on principal reductions has sometimes missed the point he’s talking about applying reductions to only a small subset of the underwater mortgates held by the GSEs, so the benefits of the policy are also seen as relatively small. It seems he and the Administration are focused more on interest refinancing than principal reductions.