Aside from being way too small and way too sweet a deal for the banksters, the recently prematurely touted settlement between the attorneys general of 49 states (plus DC) and the five biggest mortgage banks has a big, major, enormous flaw.
That’s right. We citizens and consumers have been impatiently waiting for our states’ top defenders of the law to rescue us from the big fraud-factory banks. But it turns out a whole bunch of us weren’t included in the group of homeowners deemed worthy of legal protection.
Who? It’s right there in black and white on the official website for the National Mortgage Settlement:
“Loans owned by Fannie Mae or Freddie Mac are not impacted by this settlement.”
Yep, that’s right. If you’re one of the millions of homeowners whose mortgage was guaranteed/securitized (without your permission or even your knowledge) by these big government-supported enterprises, you are SOL. Left out. Deemed unworthy of the attention of your state’s primary consumer protection agency.
I’ve seen estimates of Freddie’s and Fannie’s immersion in the mortgage market stating they “own” from 50% to 80% of the mortgages in the nation. That means for the purposes of holding the banks accountable for the foreclosure fiasco, the situations of more than half of the taxpayers and voters and workers and even job creators in the U.S. were ignored by the officials who are tasked with overseeing justice for all their residents.
Even if your loan originated with and is still serviced by Wells Fargo, Citi, BofA, Chase or GMAC/Ally, the “investor” may still be Fannie or Freddie, big players in the so-called “secondary” mortgage market.
And that’s bad news for you because it means you have no access to the touted refinancing or principal reduction or other foreclosure-prevention options provided for by the settlement. If you were a victim of foreclosure fraud such as losing your home due to bank-forged paperwork, you have no access to the restitution payments.
Granted, getting a paltry $2,000 in exchange for having your home and your life’s savings stolen via fraudulent paperwork and underhanded maneuvering isn’t much. But, then, to be told that you aren’t even eligible due to circumstances you didn’t control, just because your state’s AG didn’t include you in his or her negotiations?
I’m furious. If you think your state AG should be protecting your rights as well as those of your neighbors, you should be, too.
If your mortgage is “owned” by Fannie Mae or Freddie Mac, I suggest you write a strongly worded letter to your state attorney general and ask him or her when your rights as a citizen of that state will be upheld.
Of course, you won’t get an answer. Well, in some states, maybe a form letter. But if enough people take the time to write, perhaps the AGs will realize we know they left a big, gaping hole in their deal and we’re not happy about being pushed into it.