Wednesday, February 29, 2012

AG Harris: "Good-Faith" Pause While Introducing "Homeowner Bill of Rights"

Huffington Post and DS News learn of letter sent by California Attorney General, Kamala Harris, requesting Fannie Mae and Freddie Mac to halt foreclosures in the state while Federal Housing Finance Agency (FHFA) considers whether principal reductions are an appropriate strategy for the GSEs. 
California Attorney General, Kamala Harris
Harris states, "about a half million homes in California have been foreclosed, and another half million are either in foreclosure or on the brink of foreclosure."  In light of the national development in the settlement where principal reductions were discussed, California homeowners with mortgages from Fannie or Freddie are not included within the first round of discussions.  Currently, 60 percent of homeowners in California have mortgages backed by Fannie and Freddie.  Hence, Harris has requested a moratorium while further discussions continue with the Acting Director of FHFA, Edward DeMarco.

With DeMarco's recent analysis noting ultimately, Foreclosures never serve the long-term interest of the taxpayer when compared to Principal Reduction methods with forbearance ensuring better returns for investors while the $18 billion share of the national plan would not cover the needs of California. 

Harris along with Senate President Pro Tem, Darrel Steinberg and Assembly Speaker John A. Prez will announce the "Homeowner Bill of Rights" today.  The deal would benefit an estimated 466,000 homeowners in California.  

With this initiative, Harris is to announce sponsorship of six bills designed to guarantee: 
  • Basic standards of fairness in the mortgage process, including an end to dual-track foreclosures
  • Transparency in the mortgage process, including a single point of contact for homeowners 
  • Community tools to prevent blight after banks foreclose upon homes
  • Tenant protections after foreclosures 
  • Enhanced law enforcement to defend homeowner rights - paid for by fees imposed on banks 
  • A special grand jury to investigate financial and foreclosure crime

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