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Mon Jan 23, 2012, 10:50 AM

Dems push Fannie, Freddie regulator on mortgage write-downs

Dems push Fannie, Freddie regulator on mortgage write-downs

By Vicki Needham

Congressional Democrats are expected to continue pushing a federal housing regulator to write down mortgage principal for government-backed loans if a settlement with banks doesn't help out enough homeowners.

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The deal, which also includes states' attorneys general, would require the nation's five largest banks Bank of America, JPMorgan Chase, Citigroup, Wells Fargo and Ally Financial to spend upward of $25 billion to help borrowers caught up in so-called robo-signing practices where servicers signed-off on foreclosure paperwork without properly reviewing documents.

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While the settlement would offer about 1 million borrowers nationwide an average of $20,000 in principal reduction, it is unclear who would be eligible.

If the settlement doesn't help homeowners who have loans with Fannie Mae and Freddie Mac, Democratic lawmakers will likely keep pressing the Federal Housing Finance Agency (FHFA), the overseer of the government-controlled mortgage giants, to provide homeowners with principal reductions on their mortgages, especially those who owe more than their houses are worth.

- more -

http://thehill.com/blogs/on-the-money/1091-housing/205617-house-dems-push-fannie-freddie-regulator-on-mortgage-write-downs



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