“Preventing foreclosures is a top priority for Fannie Mae,” Terence Edwards, an executive vice president, told the panel. “Foreclosures hurt families and destabilize communities.”
But confidential documents obtained by the Free Press show that Fannie Mae has pushed an agenda at odds with those public assurances.
The documents obtained by the Free Press indicate, for the first time, that Fannie wasn’t simply indifferent to helping homeowners, but launched a concerted effort to force seriously delinquent borrowers from their homes.
Key documents
On to the story, hat tip from Free Press:
In early December, a senior executive at Fannie Mae assured members of the Senate Banking Committee in Washington that the mortgage giant was doing everything possible to address the foreclosure crisis.
"Preventing foreclosures is a top priority for Fannie Mae," Terence Edwards, an executive vice president, told the panel. "Foreclosures hurt families and destabilize communities."
But confidential documents obtained by the Free Press show that Fannie Mae has pushed an agenda at odds with those public assurances.
The records cover Fannie Mae's foreclosure decisions on more than 2,300 properties, a snapshot from among the millions of mortgages Fannie handles nationally. The documents show Fannie Mae has told banks to foreclose on some delinquent homeowners -- those more than a year behind -- even as the banks were trying to help borrowers save their houses, a violation of Fannie's own policy.
Fannie Mae has publicly maintained that homeowners would not lose their houses while negotiating changes to mortgages under the federal Home Affordable Modification Program, or HAMP.
The Free Press also obtained internal records revealing that the taxpayer-supported mortgage giant has told banks that it expected them to sell off a fixed percentage of foreclosed homes. In one letter sent to banks around the country last year, a Fannie vice president made clear that Fannie expected 10%-12% of homes in foreclosure to proceed to sale.
Taken together, the documents offer an unprecedented window into how Fannie decides whether to allow borrowers to exhaust all options to keep their homes. "It's scary, it really is," said Leisa Fenton of Clarkston, who is among an untold number of people whose homes were sold in foreclosure even though they had been assured their homes were safe while they sought mortgage relief from Washington.
