Cities to Fannie Mae – Cease and Desist fromThe Alliance of Californians for Community Empowerment (ACCE)
Beginning this Thursday, we are going to see a growing number of major U.S. cities tell Fannie Mae, Freddie Mac and HUD to “cease and desist” the sales of delinquent mortgages in their cities to Wall Street speculators. They are asking these federal agencies to sit down and discuss ways to get these troubled mortgages into the hands of non-profit purchasers that will prioritize foreclosure prevention and affordable housing creation.
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See quotes from a Philadelphia Council member and NJ Mayor below. These elected officials and others are available to discuss their position and their plans to act on these statements.
As Fannie Mae & Freddie Mac Head Towards February Sales of Over 10,000 Delinquent Mortgages Local Elected Officials Say “Not in Our Cities! Don’t Sell Our Housing to Wall Street”
City Leaders Want Federal Agencies to Sell Troubled Mortgages to Non-profits, Not Speculators
National/Multi-City: On Thursday, February 4th, local elected officials and community groups across the country will call on Fannie Mae and Freddie Mac to prioritize the bulk sale of delinquent mortgages to non-profit housing agencies as opposed to Wall Street investors.
Rallies and press conferences will be held in New York City, San Francisco and several other cities. Local elected officials in a number of additional cities will be issuing press statements to the media and introduction motions at their city councils.
Specifically, these local leaders are telling Fannie and Freddie:
Don’t sell any mortgages in our cities and states to Wall Street investors. Meet with city and state representatives and attempt to work out sales of these loans to mission-driven non-profits.
Philadelphia City Councilmember Helen Gym:
“”Federal housing agencies undermine our local recovery work when they sell troubled mortgages to Wall Street hedge funds and private equity firms. We need a better partnership that makes sure communities are protected. This Thursday, I will be introducing a resolution in the Philadelphia City Council that calls on Fannie Mae and Freddie Mac to stop any and all sales in our city until they meet with us and attempt to sell these delinquent mortgages to non-profits committed to homeownership preservation and affordable housing.”
Mayor Lester Taylor, East Orange, New Jersey
“The foreclosure and mortgage crisis in New Jersey is the worst in the nation,” says Mayor Taylor. “East Orange has taken this crisis very seriously and worked diligently to keep families in their homes and stabilize our hardest hit communities. The City of East Orange can build on our successes, but only if the federal agencies prioritize the sales of delinquent mortgages to local non-profit partners with a commitment to our residents and our communities. I want Fannie Mae to talk with our City and our non-profit partners before selling off one more troubled mortgage to Wall Street.”
This move comes as Fannie Mae and Freddie Mac have each announced February sales totaling over 10,000 mortgages and nearly $3 billion in Unpaid Principal Balance (UPB). Community leaders are worried that these federal agencies are poised to hand these homes over to Wall Street for bargain basement prices, instead of to non-profits that would focus on keeping homeowners in their homes and expanding affordable housing.
HUD, Fannie Mae and Freddie Mac have each begun to hold some small, geographically concentrated, auctions – they say to help non-profits compete. And in November HUD held several non-profit-only auctions. However, the size of these pools is tiny. It continues to be the case that over 90% of the mortgages that have been auctioned by Fannie Mae, Freddie Mac and HUD are going to Wall Street hedge funds and private equity firms. In November 2015, Fannie Mae sold 7,000 loans to Fortress Investment Group and Goldman Sachs.
While deemed “bad debt” by the sellers, most of these homes are still occupied and sit in communities where homeownership preservation and affordable housing is sorely needed. The group of elected officials speaking- out on Thursday want these loans sold to “good actors” with a commitment to loan modifications with principal reduction and the creation of affordable housing.