September 7, 2012
On September 7, ASF submitted a detailed comment letter in response to the Federal Housing Finance Agency’s (“FHFA”) August 8, 2012 notice in the Federal Register regarding the proposed use of eminent domain to seize and restructure underwater performing mortgage loans. ASF’s letter outlines our strong opposition to the use of eminent domain and the constitutional and policy infirmities that such proposals present. In addition, ASF and a number of other trade associations submitted a broad-based opposition letter to FHFA expressing similar concerns.
FHFA’s notice cites concerns that such programs would alter the value of Fannie Mae’s, Freddie Mac’s, and the Federal Home Loan Banks’ securities holdings, may be unconstitutional, and could potentially negatively affect both investors and the extension of credit to borrowers. FHFA further notes that action in response to such programs may be necessary in its role as conservator of the GSEs.
In addition, on September 6, Mortgage Resolution Partners (“MRP”) announced that it would expand its eminent domain proposal to include all loans held in private-label RMBS, including delinquent and defaulted loans, in contrast to prior statements that it would only target high value performing loans. MRP also stated that it proposes to use the same methodologies as Fannie Mae and Freddie Mac for determining the value of loans.
ASF Comment Letter: Use of Eminent Domain to Restructure Performing Loans - September 7, 2012
ASF Joint Industry Comment Letter: Use of Eminent Domain to Restructure Performing Loans - September 7, 2012
FHFA Notice: Use of Eminent Domain to Restructure Performing Loans - August 8, 2012
FHFA Press Release
San Bernardino Sun Article