Mortgage Settlement: State Attorneys General Get Results but the Administration Falls Short

(Boston, MA) The announced $26 Billion settlement by the country’s five largest banks is significant for the 10% of the mortgages that the State Attorneys General can enforce.  The remaining mortgages, most of them government (i.e. Fannie Mae, Freddie Mac, FHA and VA) are not impacted and will continue to devastate the mortgage industry.

NACA, the largest and most effective not profit organization in addressing the mortgage crisis, is disappointed that the Obama administration failed to address the government owned or insured mortgages.  The state attorneys general have been in the forefront of addressing the mortgage crisis, yet it is the administration that has not pressured the government entities to modify the mortgages.

The state attorneys general were very successful in obtaining significant assistance from the banks they can impact.  The Obama administration continues to show that they are unwilling to require the government mortgage programs, which constitute 80% of the total mortgages (i.e. FHA, VA, Fannie Mae and Freddie Mac), to be responsive in preventing foreclosures and in restructuring/modifying mortgages to make them affordable.  

States Bruce Marks, NACA CEO, “FHA, with 30% of the country’s mortgages, is the worst in modifying mortgages. It’s the height of hypocrisy for our President and HUD Secretary Shaun Donovan to say they are advocating to keep people in their homes when they control the most problematic loans,” This contrast is most appalling when veterans, those willing to pay the ultimate sacrifice, are now able with this settlement to modify a non-government mortgage, to as low as 2% permanently and/or a principal reduction, while veterans with a VA mortgage cannot achieve this and must meet nearly impossible conditions to qualify for a loan modification since they cannot reduce the interest rate to less than 4% or eliminate the outstanding principal.  

NACA is the largest HUD certified counseling agency providing about 30% of the counseling in the country.  NACA has been highlighted in the national news and its CEO was named the Bostonian of the Year in 2007 by the Boston Globe.  NACA continues its Save-the-Dream events where it modifies many thousands of mortgages on-site during these five day events.  The 59th event is now going on through Monday in San Diego at the San Diego Convention Center.

Recent National and Local News Reports on NACA ‘s Events: