Legislator Disagrees About Expediting Foreclosures
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Legislator has expressed his disagreement about expediting foreclosures. Elijah Cummings (Democrat/ Maryland) leading member of House Committee on Oversight and Government Reform in a press release detailed a note he had sent to acting director of FHFA, Ed DeMarco. FHFA is the conservator of Fannie Mae and Freddie Mac.
Cummings wanted information on the penalties amounting to $150 million that the two entities had levied on the servicers of mortgages for “failing to conduct foreclosures fast enough”.
In the letter Cummings said, “I am concerned that these penalties, at least some of which were ordered by the Federal Housing Finance Agency, may have contributed to widespread abuses by mortgage servicing companies and law firms attempting to meet arbitrary deadlines to expedite foreclosures”.
In the letter a report by Inspector General of FHFA has also been cited. In it was observed that the servicers, the lawyers and other personnel supporting them were weighed down by the sheer number of foreclosures. The letter also alleges that serious questions arise regarding the time and the amount of the penalties. Was FHFA keener to add speed to foreclosures so as to clean up its books rather than giving priority to the rights of house owners?
The press release of the letter came four hours before a hearing of this committee having as its start witness Ed DeMarco. The hearing was focusing on the bonuses paid to the executives of Fannie Mae and Freddie Mac. After endless queries DeMarco reiterated at the end that even now foreclosures were taking too long to be processed.
Addressing the committee he said, “We are foreclosing on properties that have had no payment for two, three years or more. It’s damaging the taxpayer because we have to maintain these properties for so long and it’s damaging to our communities”.
Darrell Issa (Republican/ California) the chairperson of the committee is empowered to direct funds between state and federal governments. He requested DeMarco to inform him with the names of the states that were noted for their slow churning out of foreclosure cases as this was basically injuring Fannie Mae and Freddie Mac. Issa said to DeMarco “We’re open to making the changes necessary to help”.
It meant Issa could withhold granting money for these delays in foreclosing. It would nudge the judge to stop the delays because the delays are happening in most of the judicial states. Thus one legislator thinks it’s not good to push the servicers but another thinks it’s okay to push judges to rubber stamp faster foreclosures!
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