Massachusetts Attorney General Martha Coakley has sued Fannie Mae and Freddie Mac for failing to comply with the state's anti-foreclosure law, enacted in 2012. The law seeks to facilitate buyback programs intended to reduce the debt of homeowners, while saving lenders the cost of foreclosure and eviction.
According to Coakley's lawsuit, the mortgage finance giants have refused to allow homes with mortgages that they guarantee to enter buyback programs. Mel Watt, who took over the Federal Housing Finance Agency in January, has not addressed the subject of debt reduction; but his predecessor, Edward DeMarco, did not support such programs, even though FHFA's own analysis showed it would save money for taxpayers.
"For too long, Fannie and Freddie have been roadblocks to progress in addressing this foreclosure crisis, and I urge them to immediately reverse their policy on this common-sense program," Coakley said in a statement.