- Taking money from those who earn it and re-distributing that wealth to those who have "needs".
- Affordable loans for all . . . using other people's money naturally.
Spreading the Wealth Around - In a victory for Marxism, Fannie Mae and Freddie Mac said they will immediately allow their borrowers to participate in the Keep Your Home California program that will use tax money taken from those who earn it and use the funds to shrink the mortgages of borrowers who have "needs".
Officials in the People's Republic of California made a significant change to the program, The Los Angeles Times reported previously, dropping a requirement that banks match taxpayer funds when homeowners receive mortgage reductions through the program. That means that Fannie and Freddie will not have to incur further losses on their loans in order to participate.
The two mortgage giants have now released guidance to the mortgage companies that work with them, signaling they would allow Fannie and Freddie borrowers to participate in the program.
“Effective immediately, you should participate in state ... modification assistance programs that permit you to apply funds as a partial principal curtailment for homeowners with Freddie Mac-owned or guaranteed mortgages,” read the Freddie Mac guidance. “With this change, you have an additional way to help borrowers achieve a more affordable payment and reduce their loan-to-value ratio.”
Made "more affordable" by taking money from other people. Money that those other people will no longer have to spend on their own wants and needs.
Only a small number of California homeowners — 8,500 to 9,000 — would be able to get mortgage write-downs with the current level of funds available.
But the participation by Fannie Mae and Freddie Mac could significantly help officials spend the money available for the Keep Your Home California program. Fannie Mae and Freddie Mac own about 62% of outstanding mortgages in the Golden State.
The initiative, which uses federal funds from the 2008 Wall Street bailout to help borrowers at risk of foreclosure, has faced lackluster participation and lender resistance since it was rolled out last year. By eliminating the requirement that banks provide matching funds, state officials hope to make it easier for homeowners to get principal reductions.
The two mortgage giants were seized by the federal government in 2008 as they bordered on bankruptcy, and taxpayers have provided billions to keep them afloat.
Edward J. DeMarco, head of the federal agency that oversees Fannie and Freddie, has argued that principal reduction would not be in the best interest of taxpayers and that other types of loan modifications are more effective.
He refused to allow the two companies to participate in a principal reduction program through the Obama administration’s signature foreclosure relief program, the Home Affordable Modification Program.
(Los Angeles Times - Business)