Santa won't be bringing Fannie, Freddie eviction notices (but some banks are getting sued for the holidays)
Mortgage giants Fannie Mae and Freddie Mac both announced yesterday that they'll put a freeze on foreclosure evictions from Dec. 19 through Jan. 2, a temporary Christmas present of sorts.
The mortgage industry is generally loath to toss people out at the end of the year, whether out of compassion or because images of "Homeless for the Holidays" headlines are dancing in officials' heads. Several large financial companies, including Bank of America and Wells Fargo, told CNNMoney that they would suspend or "avoid" evictions around Christmas.
"The holidays are meant for families to spend time together, especially if they’ve gone through the stress of financial challenges and foreclosure," Terry Edwards, an executive vice president at Fannie Mae, said in a statement. "No family should have to give up their home during this holiday season."
The Fannie and Freddie moratoriums on lockouts apply only to occupied homes.
While we're on the subject of foreclosure: The Massachusetts attorney general yesterday sued five big banks and mortgage-registrar MERS, alleging that they pursued "illegal foreclosures on properties in Massachusetts as well as deceptive loan servicing."
The suit focuses on claims of pervasive robo-signing, foreclosing without actually holding the mortgage, breaking promises about loan modifications and debasing Massachusetts' land recording system by using MERS to avoid recording mortgage ownership (and paying fees) as loans changed hands.
MERS responded that it "has not engaged in or facilitated any violation of the Commonwealth's statutes." Here is the full statement.
"The single most important thing we can do to return to a healthy economy is to address this foreclosure crisis," Massachusetts' attorney general, Martha Coakley, said in a statement. "Our suit alleges that the banks have charted a destructive path by cutting corners and rushing to foreclose on homeowners without following the rule of law."
Other states have also forged their own paths as the multi-state attorneys general inquiry into robo-signing and foreclosure problems drags on. Maryland Attorney General Douglas F. Gansler is still involved in the national effort.
David Paulson, a spokesman for the attorney general, noted that Gansler is not on the executive committee trying to negotiate a settlement but said he is "monitoring the progress."
"There is so far not a proposal on the table ... from the executive committee to look at," Paulson said. "When we get it, we're going to take a long, hard look at it before signing, if signing is warranted, that it protects and promotes the interests of Maryland consumers, Maryland homeowners, with an eye towards preventing foreclosures in the future and helping homeowners who are in trouble."
Categories: The foreclosure mess
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Comments
For better or worse, laws and governments only maintain their legitimacy when they have the support of the majority of the people. There was a recent case where local police refused a bank order to evict a 103 year old woman.
Posted by: Captain Obvious | December 2, 2011 3:32 PM
So Doug Gansler is waiting around to see what the national settlement would entail. Sorry, Mr. Gansler but as Maryland's Attorney General one could rightfully expect you to investigate and prosecute, if warranted, crimes against Marylanders under Maryland law. Waiting for someone else to act and a settlement that includes immunity from prosecution to those who broke the law is unconscionable. Gee, Mr. Gansler, does this mean you would let me break some drug laws or commit fraud but then get the penalties reduced to a fraction of what I gained through the law-breaking and immunity from prosecution? Oh wait, I am not a big bank or corporation so I guess the answer is no.
Posted by: Anonymous | December 4, 2011 12:59 PM