AG Coakley to Focus on Fannie Mae and Freddie Mac in Speech Before Greater Boston Interfaith Organization
Says Fannie and Freddie Should Allow Principal Forgiveness in Loan Modifications
BOSTON – In her continuing effort to hold banks accountable and stabilize the housing market, Attorney General Martha Coakley will reiterate her call for Fannie Mae and Freddie Mac to provide principal forgiveness to struggling homeowners in a speech before the Greater Boston Interfaith Organization (GBIO). The GBIO is expected to honor AG Coakley for her ongoing work to address the foreclosure crisis and keep people in their homes by avoiding unnecessary foreclosure.
Before an expected 350 members of the faith community of Greater Boston, AG Coakley will insist that the Federal Housing Finance Agency (FHFA) should allow for principal forgiveness, guided by a net present-value analysis, to increase loan modifications and help the economy. Fannie Mae and Freddie Mac have expressed an unwillingness to participate in federal loan modification programs, that include principal forgiveness. Last month, AG Coakley sent a letter to the acting director of the FHFA urging a change in this position. Members of the Senate Banking Committee are now expected to discuss this issue during a hearing on Thursday afternoon.
“Fannie Mae and Freddie Mac own a majority of the nation’s home loans. They should be a leader in the arena of loan modification best practices, not an obstruction,” said AG Coakley. “More than five million people have lost their homes due to foreclosure in the past five years, with millions more on the brink of foreclosure, struggling to stay in their homes. Fannie Mae and Freddie Mac should change course and participate in a proven model to help homeowners avoid unnecessary foreclosures.
A day after filing the national state-federal settlement over robo-signing in federal court, AG Coakley will describe how more than $300 million in assistance will soon flow to Massachusetts borrowers. She will explain how her office secured an additional “carve-out” to enable her office to continue litigation and pursue claims over “MERS” and “Ibanez” issues which was an important part of her own lawsuit filed against the five major banks. AG Coakley also will discuss her decision to join the Residential Mortgage-Backed Securities task force in order to lend Massachusetts expertise regarding its own investigations into the use of mortgage-backed securities which contributed to the financial crisis.
During the speech, AG Coakley will highlight her other numerous actions to address the foreclosure crisis, including against Fremont, Option One , Countrywide , Morgan Stanley , Goldman Sachs and Royal Bank of Scotland which all resulted in loan modifications designed to remedy unfair and unsustainable loans in Massachusetts. Not including the national state-federal settlement, AG Coakley’s office has already recovered more than $600 million in relief for investors and borrowers, helped keep more than 25,400 people in their homes, and returned nearly $60 million in taxpayer funds back to the Commonwealth.
The GBIO also expects to honor AG Coakley for her continuing work to examine health care cost trends in Massachusetts and work to control those costs. AG Coakley will tell the GBIO that Massachusetts has achieved the highest health care access rates in the nation at 98 percent.
AG Coakley will point to her office’s two year study that shows cost disparities are not based on differences in quality, but on market leverage. In order to help control costs, AG Coakley says she supports setting clear and reasonable price goals, and giving providers and insurers three years to adjust and meet those goals. If those market efforts fail and those price goals have not been met by 2015, then the AG’s proposal would allow the administration to temporarily intervene and bring the market into alignment.
Greater Boston Interfaith Organization
Attorney General Martha Coakley
Tuesday, March 13, 2012
Roxbury Presbyterian Church
328 Warren Street, Roxbury