Sens. Charles E. Schumer, D-N.Y.; Robert Menendez, D-N.J.; Sherrod Brown, D-Ohio; and Bob Casey, D-Pa., have called on the newly tapped chief executives of Fannie Mae and Freddie Mac to put an immediate and temporary freeze on foreclosures on all loans held by the companies.
The freeze would serve as a stopgap measure until the two companies can perform wholesale loan modifications – allowing millions of Americans to keep their homes, according to the senators.
‘These are mortgages held in their entirety by Fannie Mae and Freddie Mac, and can be modified with little or no limitation. This action would provide immediate relief to many homeowners and, as importantly, give each GSE a further opportunity to turn these nonperforming loans into performing assets to minimize losses,’ the senators wrote in a letter to the executives.
In addition, the senators called for changes in the way loan modifications are performed. ‘A more proactive change in Fannie Mae and Freddie Mac policies regarding loan modifications would not only help homeowners and the housing market more generally, but would benefit the firms, and could limit any costs to the federal government by transforming nonperforming loans into performing assets with stable, long-term cashflows,’ they explained.
Source: Office Of Sen. Bob Casey