Mortgage Professional America forum is the place for positive industry interaction and welcomes your professional and informed opinion.

Could underwater FHFA borrowers catch a break?

Notify me of new replies via email
Mortgage Professional America | 06 Feb 2015, 08:57 AM Agree 1
Mel Watt said the regulator is considering reducing the balances of some homeowners’ mortgages, but the effort could prove to be challenging.
  • Cheryl M | | 06 Feb 2015, 09:54 AM Agree 1
    Not a challenge after all, recent settlements with class action lawsuits and 48 state Attorney General offices already did that for you Mr. Watt. Fannie and Freddie mortgages came from those already in this process the "mortgagee's" and servicers for those underwater mortgages. Some are one in the same...such as Wells who originally was the mortgagee, but sold their mortgage to Fannie and Freddie remaining the servicer. (a common practice in the industry) Now go back to Wells as the "mortgagee" review their mortgage origination and original note, most are from 2006, etc. Many of these mortgages have over inflated values of which the mortgagee placed on these "underwater" mortgages. Same goes for Chase, all these mortgagee's and servicers rightfully owe Fannie and Freddie the difference not the taxpayers. Start with those mortgages sold to Fannie and Freddie that have these similarities. You'll find them, and you won't be surprised what you find over... inflated values.
  • Susan P | | 09 Feb 2015, 03:31 PM Agree 0
    The borrower in every instance agreed to the terms of the mortgage including the appraised value upon which the money was lent. Mortgagees and servicers do not owe Fannie a Freddie a dime on underwater mortgages. Principal should not be reduced. Borrowers should pay the mortgage as agreed, and if they are disturbed by valuation then they have the option to walk away and suffer the consequences of foreclosure.
  • onemorevoice | | 07 Mar 2015, 11:05 PM Agree 0
    Yes, borrowers agreed to the appraised value of the homes and in most instances were told the mortgage market was stable. Homes in 2006 were grossly overvalued and I dare say that most people would not have purchased at those inflated values had they known the market would crash in 2007. Coupled with job loss, devalued personal investments (IRA, 401's etc.) many homeowners found themselves in mortgage hell. The unscrupulous behaviors of banks and/or mortgage companies are now being challenged in court as many investors are seeking recourse from being sold securitized mortgages packages that were knowingly overinflated. The settlements many states AG's secured is a testament to the chaos caused by illegal activity at a cost to both taxpayer and homeowner. So I ask why investors and government entities can recoup losses from illegal activity but homeowners should have no recourse?
Post a reply