The ink is not yet dry on a $25 billion national foreclosure settlement with five major banks, but Attorney General Martha Coakley has already trained her sights on two more targets.
Coakley, on Friday, told the News Service that unless Fannie Mae and Freddie Mac agree to begin modifying loans for borrowers victimized by fraud, an untold number of Massachusetts homeowners could be left without any relief.
“People are recognizing that we’d love to get the same relief we were able to accomplish through the 50-state settlement for these homeowners caught in the middle because Fannie and Freddie are not willing to entertain loan modifications or principal write downs,” Coakley said.
Massachusetts on Thursday became one of 49 states to sign on to the national settlement with the country’s five largest lenders netting roughly $318 million in relief for Bay State homeowners through loan modifications for borrowers at risk of default or “under water” because they owe more than their home is worth.
Coakley also retained the right as part of the settlement to pursue additional Massachusetts specific claims against the banks as part of lawsuit she filed in December that could bring additional relief.
Those homeowners that borrowed through Fannie Mae and Freddie Mac, however, are not covered under the settlement. Coakley said it’s unclear how many loans backed by Fannie and Freddie are active in Massachusetts, but nearly 60 percent of mortgages nationwide are held by the two agencies, and 45,000 Massachusetts owners have faced foreclosure since 2008.
Many more borrowers, according to Coakley, could be ineligible for relief under the new settlement if their mortgages are serviced by one of the five banks, but owned by Fannie or Freddie.
Read more here