Fannie Mae says that if you are facing foreclosure, they are “here to help”. The question is, helping whom? In Michigan, it isn’t the homeowners.
Michigan leaders in the fight against the foreclosure crisis reacted strongly Sunday to revelations that mortgage giant Fannie Mae appears to have been pushing banks to foreclose on homeowners rather than continue negotiating loan modifications.
The story broke in the Detroit Free Press, which reported it had been given some 2,300 internal records and memos from Fannie Mae. Those documents included indications that lenders should proceed to foreclosure sales rather than allow any time for modifications, and memos which indicate the company was threatening to charge a penalty to lenders who allowed foreclosures to wait too long before they were executed.
Particularly troubling was the fact that these memos came at the same time that Fannie Mae officials were testifying before Congress that they were doing everything in their power to prevent foreclosures.
“I am thoroughly disgusted by the actions of Fannie Mae,” said Ingham County Register of Deeds Curtis Hertel, who is currently suing Fannie Mae and other lenders arguing that they failed to pay Ingham county millions of dollars in title transfer taxes. “What these internal documents show is that while Fannie Mae was being bailed out by taxpayers they were systematically pushing for citizens to be foreclosed. The reason for this is even worse. Right now we as taxpayers pick up the cost of every foreclosure, because we pay Fannie Mae’s loss in the foreclosure process. In other words they actually get paid more for a foreclosure than for a reasonable modification.
The hypocrisy here is evident. Fannie Mae’s policies should match their rhetoric.