Mass. Sues FHFA Over Foreclosure Buybacks
June 3, 2014
The state of Massachusetts is suing the Federal Housing Finance Agency, alleging that the agency's policies violate a state law allowing nonprofit organizations to buy foreclosures and resell them to the original evicted home owners.
Massachusetts Attorney General Martha Coakley is asking FHFA to amend its policies that currently prohibit Fannie Mae and Freddie Mac, which are under FHFA's conservatorship, from participating in "credible buyback programs."
Coakley's complaint says that Fannie and Freddie are undermining state programs such as the Boston Community Capital's Stabilizing Urban Neighborhoods Initiative, which purchases homes owned by a lender at current market value and then finances the immediate resale to the former home owner.
"It makes no sense for our federal government to stand in the way of this work to help struggling families stay in their homes, and it is illegal for Fannie and Freddie to do this in Massachusetts," Coakley says. "I urge them to immediately reverse their policy on this common-sense program. ... We believe that buyback programs implemented by credible not-for-profit institutions are key to helping home owners recover from this foreclosure crisis and restoring a healthy economy.”
Source: “Massachusetts Sues FHFA, Fannie and Freddie Over Foreclosure Buybacks,” HousingWire (June 2, 2014)
Updated: November 23, 2020