New Policy Goes Only Partway in Helping Struggling Homeowners
The Latest from HLS Clinical Programs 2014-12-27
Well, that was fast. At a Senate Banking Committee hearing on Nov. 19, Melvin Watt, the director of the Federal Housing Finance Agency, was in the hot seat, explaining to Senator Elizabeth Warren why Fannie Mae and Freddie Mac had done so little to help families who were facing foreclosure save their homes….
Housing advocates like Eloise Lawrence, a staff lawyer with the Harvard Legal Aid Bureau, have an answer. Although expressing disappointment about the limited nature of the directive, Ms. Lawrence described it as “a positive move in the right direction.” She also noted that the bureau has four families who would directly benefit.
Those clients include Ramon and Rosanna Suero. As described in a DealBook column in June, the Sueros purchased a condominium in Dorchester, Mass., in 2005 for $283,000, using a combination of two high-risk mortgages. They lost the condo in a foreclosure sale in 2010. The nonprofit group Boston Community Capital has offered to purchase the condo from Freddie Mac for the fair market value of $115,000. The group hopes to sell it back to the Sueros, financed with a more affordable fixed-rate mortgage.
Freddie refused Boston Community Capital’s offer, saying that only the full balance on the loan was acceptable because the home would be returned to its owners. Under Freddie’s policy, anyone other than the Sueros could buy at the lower market value.
So in 2013, the Sueros, who are jointly represent by Andrea Park of the Harvard Legal Aid Bureau and Nicole Summers of the Northeast Justice Center, sued Freddie Mac. The court has ordered that pending the outcome of the case, the family cannot be evicted and the condo cannot be sold. Their condo is one of the properties in Freddie’s inventory that is subject to the new directive.
We wonder, then, will the Sueros have their home back for the holidays? It’s too soon to tell. Stefanie Johnson, a spokeswoman for the Federal Housing Finance Agency, responded via email that the agency “does not comment on pending litigation.” She added that “individuals can apply” under the new policy and that “this will be addressed” by Freddie Mac and Boston Community Capital.
Continue reading the full story here.