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Dover Post: Biden, Coakley among attorneys general urging mortgage principal reductions
A coalition of attorneys general from 11 states, including Delaware Attorney General Beau Biden and Massachusetts Attorney General Martha Coakley, called on the federal government to begin offering relief to homeowners whose properties have lost value.
The attorneys general are seeking an increase in the Federal Housing Finance Agency’s use of principal reductions to help homeowners. The FHFA oversees the government-sponsored entities Fannie Mae and Freddie Mac, which collectively own approximately 60 percent of U.S. home mortgages.
Edward DeMarco, acting director of FHFA, recently acknowledged that principal forgiveness may be beneficial to homeowners and investors who own mortgages. A letter to Demarco from the coalition of attorneys general advocates for quick action on principal forgiveness in federal loan modification programs. The attorneys general say that principal forgiveness would give borrowers an incentive to maintain their mortgage payments.
Reluctance to participate in principal forgiveness because of the inability of computer systems to handle new programs is not an excuse, the letter also states.