Huffington Post Features BCC in “Fannie Mae, Freddie Mac Resistance to Principal Reduction Costs Taxpayers”

Monday, March 26, 2012

Boston Community Capital’s SUN Initiative was featured in The Huffington Post article, “Fannie Mae, Freddie Mac Resistance to Principal Reduction Costs Taxpayers.”  The article, written by reporter Peter Goodman, discusses Fannie Mae and Freddie Mac’s opposition to principal reduction and its negative impact on taxpayers.  Goodman profiles families who are fighting to stay in their homes, including the DeCaro family, who has been working with BCC to save their home.  BCC has agreed on a short sale price with Bank of America and Freddie Mac, but because of Freddie Mac’s “arms-length” provision, BCC is unable to go through with the short sale.

Goodman also challenges the reasoning for which Fannie and Freddie oppose principal reductions.  “Fannie and Freddie together control more than half of all American mortgages. Their continued resistance to forgiving principal balances stands in the face of growing sentiment among housing experts that such a course is required to stabilize the housing market. The Obama administration previously opposed principal forgiveness, but now advocates it as a key piece of limiting foreclosures.”
Boston Community Capital CEO Elyse Cherry argues that Ed DeMarco, who oversees Fannie and Freddie as acting director of the Federal Housing Finance Agency, '"says he has an obligation to making sure that the taxpayer gets the greatest bang for the buck.  But the burden on the taxpayer is not just about the losses on Fannie and Freddie. It's what happens to the need for fire and police services when homes are abandoned, and what happens to communities when blight comes back. I can't figure out as taxpayers, how are we possibly better off blowing up our neighborhoods?"'