Federal Financial Housing Agency (Fannie and Freddie) Might Be Trying To Stop California Homeowner Bill of Rights

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Federal Financial Housing Agency Might Be Trying To Stop The California Homeowner Bill of Rights From Being Passed.


June 2nd, 2012

Written by John Wright

The federal government might be protecting the private banks — because in retrospect — the federal government is a bank.  This is after you consider the fact that the federal government owns and operates Fannie Mae and Freddie Mac.  What does this mean?  Well, unfortunately, it might mean that the federal government and the private banks have the same common goal, which might be to make sure it never gets out that both the private banks and the federal government have loans where there are multiple trusts and multiple beneficiaries existing.  What does that mean?  Well, it means there is a break in the chain of title, which probably exist in the majority of the Fannie and Freddie loans.Click here for laws

Now this does not mean that I am suggesting that the federal government has a cozy relationship with the private banks.  In fact — I think the federal government might be kind of pissed off at the private banks for selling Fannie and Freddie those defective loans.  For example, the Federal Housing Financial Agency sued 17 of the largest lenders last September for “misrepresenting the quality of mortgage backed securities sold to Fannie Mae and Freddie Mac.”

The FHFA sued the following 17 banks:

  1. Ally Financial Inc. f/k/a GMAC, LLC ($6 billion)
  2. Bank of America Corporation ($5 billion)
  3. Barclays Bank PLC ($4.9 billion)
  4. Citigroup, Inc ($3.5 billion)
  5. Countrywide Financial Corporation (Owned by BofA) ($26.6 billion)
  6. Credit Suisse Holdings (USA), Inc
  7. Deutsche Bank AG ($14.2 billion)
  8. First Horizon National Corporation ($883 million)
  9. General Electric Company ($549 million)
  10. Goldman Sachs & Co. ($11.1 billion)
  11. HSBC North America Holdings, Inc. ($6.2 billion)
  12. JPMorgan Chase & Co. ($33 billion)
  13. Merrill Lynch & Co. / First Franklin Financial Corp. ($24.8 billion)
  14. Morgan Stanley
  15. Nomura Holding America Inc. ($2 billion)
  16. The Royal Bank of Scotland Group PLC ($30.4 billion)
  17. Société Générale ($1.3 billion)

Yet the question is — if Federal Financial Housing Agency sued 17 private banks for misrepresenting the quality of the loans — while stipulating the the “defendants falsely represented that the underlying mortgage loans complied with certain underwriting guidelines and standards, including representations that significantly overstated the ability of the borrowers to repay their mortgage loans.” — wouldn’t that suggest homeowners around the nation should now sue Fannie and Freddie for the same thing — since they now claim to own these loans?


Now you may not think so — but the California Attorney General certainly did — because on December 19th, 2011, California Attorney General Kamala D. Harris sued Fannie and Freddie in an effort to further her probe into the mortgage foreclosure practices of Fannie Mae and Freddie Mac.  California Attorney General Kamala D. Harris even went as far to call for FHFA director Edward DeMarco to step down — unless he was willing to reduce mortgage debt for underwater borrowers.  For the record, the FHFAhas still forbidden principal writedowns even until today.read article


Fannie, Freddie regulator still resists principal reduction


April 10th, 2012 – Allowing Fannie Mae and Freddie Mac to offer principal reductions may save money thanks to enhanced government incentives, a preliminary analysis released Tuesday shows.

But that doesn’t mean their regulator, Ed DeMarco of the Federal Housing Finance Agency, is warming up to the idea.

DeMarco is facing tremendous pressure to allow the government-controlled mortgage titans to allow principal reduction on the mortgages they back. Some advocates say the best way to stabilize the housing market is to lower the balances for borrowers who owe more than their homes are worth.

DeMarco, however, has steadfastly resisted it, saying previous studies showed principal reduction would be too costly.

The Obama administration sweetened the pot earlier this year by tripling the incentive payments for Fannie and Freddie if they forgive principal. This prompted the firms to take another look at their analysis.

Turns out the increased incentives would make it more beneficial for Fannie and Freddie to offer principal reduction to homeowners who are deeply underwater and behind in their payments.

The $26 billion crapshoot

But DeMarco isn’t backing down just yet. Speaking at the Brookings Institution Tuesday, he brought up several other concerns and costs to principal reduction.

His primary worry is that providing principal forgiveness could prompt many of the 2 million borrowers who are current with their payments to fall behind. Having them default will hurt the housing market more than offering principal reduction will help it, he said.

“The far larger group of underwater borrowers who today have remained faithful to paying their mortgage obligations are the much greater contingent risk to housing markets and to taxpayers,” he said, adding these homeowners can lower their monthly payments through the government’s refinance program.

Also, he pointed out that no more than 600,000 borrowers would be eligible for principal reduction under Fannie and Freddie. This is the universe of folks who are delinquent in their mortgages and whose balances are more than 115% of their homes’ value.

“This is not about some huge difference-making program that will rescue the housing market,” the regulator said.

DeMarco touted a principal forbearance program that Fannie and Freddie already offer. It calls for the companies to defer payment of the underwater portion of the mortgage until the borrower sells the home or refinances. The homeowner pays no interest on the deferred principal.

The regulator said a final decision should be made in the next few weeks.

At least one analyst doubts that Fannie and Freddie will opt to reduce principal significantly, noting that DeMarco praised principal forbearance and warned forgiveness would help relatively few people.

“We see this as a strong political attack against principal reduction,” said Jaret Seiberg, an analyst with Guggenheim Washington Research Group. - source article money.cnn.com

Oh please Mr. DeMarco!  Can we please have a principal reduction?  We promise to be good little boys and girls if the federal government gives us a reward for paying on time!  Who knows?  Maybe we will get to go on a field trip if we are really good!

WTF was this guy thinking?  This guy makes me want to down a can of Coca-Cola — just to let out a burp where I say – “Prrrrick.”  I mean — it is guys like this that sometimes make me think we should just go back to the practice of tar and feathering and marching them down the street!

Now correct me if I am wrong — but it almost sounded like this fool was talking about the people who are not paying as being not worthy of receiving help.  Well, if so, those are pretty big words coming from a guy that is charge of a bank (Fannie and Freddie) that is the epitome of being rewarded for bad behavior with taxpayer money.  This is especially after you consider that the federal government has generously pumped 16.6 TRILLION DOLLARS of our taxpayer money into bailing out the very banks who created this crisis in the first place.  With that being said, I noticed that nobody seemed to worry about the taxpayer bailout “prompting other banks that were current to default so they could get a taxpayer bailout.”  Where was the federal government to stop that moral hazard? (Dramatic license used with use of picture) (Disclaimer)


The simple fact is that the American homeowner is no longer fat – dumb – and happy.  The American homeowner is well aware that there has most likely been a break in the chain of title in most of those Fannie and Freddie loans. -  S.F. audit of loans.  This is exactly why I think the real reason was that the FHFA sued those 17 banks in the first place.  That is why Mr. DeMarco should have been farting magical fairy dust that created a principal rate reduction for every Fannie and Freddie loan.  This might have been his last opportunity to settle with the American homeowner – before we get more pissed off than we already are.

Well look at the bright side.  At least there might be one thing that homeowner and Bank of America can finally agree on.  That is that we both apparently do not like the Federal Housing Finance Agency and Edward DeMarco. – BofA Stops Selling Loans to Fannie Mae

This is exactly why I say the federal government might simply have the same motive as the private banks when it comes to the multiple trust and multiple beneficiary issue.  This is because, like all the private banks, Fannie and Freddie (The Federal Government) simply have too much to lose, if people were allowed to receive their homes free and clear because there was a break in the chain of title.  In fact, that might be the very reason the Federal Housing Financial Agency has started to lobby state officials in California in the same way the private banks do.  For example, fourteen members of the California Congressional Delegation sent a letter to the Federal Housing Finance Agency blasting it for its involvement and opposition to key pieces of the California Homeowner Bill of Rights. – Click here for article

Copies of letters below:

  1. May 30, 2012 Cded FHFA Mortgage Lobbying Letter
  2. Federal Housing Finance Letter

This is  why I say that Fannie and Freddie and the Federal Housing Finance Agency should not be considered a friend to the homeowner on this issue.  This is simply because there seems to be a serious conflict of interest going on here.  That is because in the end — it could be said that those who have loan with Fannie and Freddie have something in common with the American Indians.  This is because – just like the American Indians –  these homeowners have also been foreclosed on by The United States Governnmet – which might be the real Bank of America at the end of the day.

Now — on the other hand — the fact that the California Attorney General sued Fannie and Freddie is exactly one of the many reasons that California Attorney General Kamala D. Harris will always be considered a friend to the California homeowner in the Golden Gate and the Golden State of California.  


That is why I am asking you to take action today by holding accountable any public official that does not vote in favor of the Homeowner Bill of Rights in any future election for office.  This is because it is important that we let them know that the California homeowner stands in support of California Attorney General Kamala D. Harris and the Homeowners Bill of Rights.

Therefore, please take a moment of your time to write the six California government officials that will be voting on the Homeowners Bill of Rights.  Please attach this link to the email that you send them.  Please also be sure to send this link to all of your friends.

These are the State Officials that will be voting:

  1. Noreen Evans: http://sd02.senate.ca.gov/contact
  2. Mike Feuer: http://asmdc.org/members/a42/
  3. Ron Calderon: http://dist30.casen.govoffice.com/
  4. Mike Eng: http://asmdc.org/members/a49/
  5. Sam Blakeslee: http://cssrc.us/web/15/
  6. Don Wagner: http://arc.asm.ca.gov/member/70/

If you are out of state – use 95126 zip code to send them an email.


Your turn Martin: Mandelman Matters

Update on July 3rd, 2012 - California Homeowner Bill of Rights Passes Legislature, Bringing Mortgage Reforms One Step Closer to Law


My name is John Wright AND I AM FIGHTING BACK!

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  1. jcmc says:

    Kamala Harris Rocks!
    I will write to each of these state officials !

    Cary on Captain Wright! Excellent work!

  2. jcmc says:

    Kamala Harris Rocks!
    I will write to each of these state officials !

    Cary on Captain Wright! Excellent work!

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