Martha Coakley Gets a Partial Win on Foreclosures
Martha Coakley—and other homeowner advocates—got a big, if incomplete, victory earlier this week, and it’s gone oddly unnoticed by Massachusetts media.
In a decision announced Tuesday, the Federal Housing Finance Agency (FHFA) ordered Fannie Mae and Freddie Mac to start selling back foreclosed properties to their previous owners, either directly or through third-party organizations. Their previous refusal to do so was the impetus for a Massachusetts state law and subsequent lawsuit, brought by Coakley’s Attorney General office.
That lawsuit had been front-page news in Boston last spring. So was a Globe article in October suggesting that Coakley had brought the suit to benefit her campaign finance co-chair, Elyse Cherry, and her organization, Boston Community Capital (BCC). (I was critical of the Globe for running that story so prominently, late in Coakley’s gubernatorial campaign.)
The new policy will apply only to some 125,000 current Fannie and Freddie holdings, but not those foreclosed on in the future. Federal officials have expressed concerns that the policy could encourage home owners to go through foreclosure in order to buy back their homes at the current, lower price.
“The FHFA decision is a significant victory for many families faced with eviction by Fannie Mae and Freddie Mac,” Steve Meacham of City Life/Vida Urbana told me in a statement. “Those families were facing eviction even though they or a non-profit working with them were offering to buy back their homes at the current value. Fannie and Freddie were willing to sell to hedge funds at a lower price than to non-profits. That was an inexcusable policy and City Life is very pleased it has been partially reversed.”
Coakley put out a statement to the press when the new policy was announced. “This is encouraging news for homeowners in Massachusetts and across the country. The reversal by FHFA of Fannie and Freddie’s policies, which we have long advocated for and brought suit over in part, alters some of their rigid policies toward buyback programs to help keep people in their homes. While this is a step in the right direction, we encourage FHFA to further help families regain financial footing by permitting principal reduction and allowing all properties in the foreclosure process to benefit from this change to its buyback policies.”
Cherry was quoted praising the decision in media reports. And several reports, both before and after Tuesday’s announcement, pointed not only to Coakley’s lawsuit, but also to Senator Elizabeth Warren’s role in pressing the FHFA for the change. So it’s a little strange that the news has so far been absent from Massachusetts media, including the Globe.