Washington, D.C. — Today, the Federal Housing Finance Agency, or FHFA, announced new rules governing any bulk sales of delinquent loans by mortgage giants Fannie Mae and Freddie Mac. Over the past year, Freddie Mac has held two such auctions, and Fannie Mae is expected to follow suit in the near future. Julia Gordon, the Director of Housing and Consumer Finance at American Progress, released the following statement:
Today, FHFA has taken an important step to improve outcomes for homeowners whose loans are sold and to increase the transparency of the transactions. Applying minimum standards to all buyers of distressed loans, along with requiring detailed reporting even for loans that are resold, will help ensure that homeowners are treated fairly and that the sales do not further destabilize hard-hit communities.
Investors in these pools should take advantage of the discount that they receive to provide homeowners with principal reduction loan modifications and other foreclosure alternatives. Additionally, FHFA should monitor the outcomes of these auctions closely, make the outcome information public, and use the collected data to inform further program changes to improve outcomes for families and neighborhoods.
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