In the midst of the foreclosure crisis, Washington has been anything but quiet. Even state government officials have been speaking out about the need for mortgage reform and help for underwater homeowners. Despite recent efforts to help struggling homeowners, many are still pushing for more action to be taken.
Speaking Up For Homeowners
California’s Attorney General, Kamala Harris, has been a big voice in advocating for government efforts to relieve the housing market . As one of the hardest hit states during the foreclosure crisis, California natives have seen their fair share of problems. In response to many issues, one of the big ones being the foreclosure processing abuse and prevention scams, Ms. Harris is urging for lenders to also step up their relief efforts.
Fannie Mae and Freddie Mac have been asked to take part in a “write down” of mortgages for underwater homeowners. A mortgage “write down” would mean that the mortgage loan would be reduced to meet the current value of the home, thereby eliminating the gap between what is owed on the home and what the home is actually worth.
Not Playing Ball Just Yet
Fannie and Freddie have released information indicating they are not willing to participate in the mortgage write down. They report that of the 20 percent of their secured mortgages that are underwater, nearly 90 percent of those are still current and not facing the threat of foreclosure. Further, both Fannie and Freddie report their concern that a mortgage write down would encourage more defaulting in mortgages from homeowners looking for a little help.