Under a new state law, Fannie Mae and Freddie Mac must offer reasonable loan modifications to avoid foreclosing on some delinquent borrowers, Massachusetts Attorney General Martha Coakley said in a letter to the Federal Housing Finance Agency, which oversees the two government-sponsored mortgage giants.
The Massachusetts law, signed by Governor Deval Patrick Aug. 3, requires creditors to take “commercially reasonable” steps to avoid foreclosing on certain mortgages if by modifying the loan the lender would realize a greater return than it would in a foreclosure.
Comments
Why is she even asking them to reduce the principle? I can totally understand wanting to rework the terms (let them refi for a longer term, etc) but am adamantly against just pretending that they didn't borrow as much as they did.