Frank Vows to Put an End to Fannie and Freddie Waivers
Elana Schor at Talking Points Memo has a great inauguration interview with Rep. Barney Frank (D-Mass.). She asked him about TWI’s story last week revealing that homeowners have to sign away their rights to sue lenders, if they want to get a loan modification under Fannie and Freddie’s streamlined loan modification program.
Frank said he had no idea the waivers were being required, and vowed to get rid of them — immediately.
Here’s the exchange:
TPM: The next question goes to mortgages, to shift a little bit. Countrywide executives testified before your committee last summer that they were requiring borrowers who had loan modifications to sign away part of their legal rights … a recent investigation found that Fannie and Freddie now make the same waiver requests of folks who are getting their loans modified. Were you aware of that? Do you think that’s a troubling trend?
FRANK: Yes, uh, it’s a very troubling trend. We were not aware of it. As a matter of fact, by the time that question was posed, Countrywide had been bought by Bank of America, and Bank of America has ended that practice. … I have friends who said ‘well, Bank of America’s too big, shouldn’t we stop them from buying Countrywide?’ … [M]y answer was, I would have been happy if Syria bought Countrywide, because it was one of the most irresponsible institutions out there. Bank of America has done a very good job … I did not know until you just told me that Fannie and Freddie were doing that and I can pretty much guarantee you that we will have put an end to that within a few days.
I’ll keep you posted on what happens with the waivers.