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Foreclosure Sale of JCC Board Chair’s Home Likely Halted

Foreclosure Sale of JCC Board Chair’s Home Likely Halted

By Desiree Parker

Tuesday, February 28, 2012

James City County Board of Supervisors Chair Mary Jones was slated to lose her home in a foreclosure auction this week; her husband filed for Chapter 13 bankruptcy protection Friday, which may stop the sale for the time being.

The home is owned by Jones’ husband, Archbold (Arch) Jones III, and it was set to be sold in late September 2010 at a similar auction. That sale was stopped at the last minute when Arch Jones’ attorney, foreclosure expert Henry McLaughlin, filed court documents to halt the sale. This most recent bankruptcy filing is the fifth time since 2009 that Arch Jones has filed for Chapter 13 protection in Virginia. Chapter 13 allows people to work out a payment plan for debts. He filed for Chapter 7 once in 2002; Chapter 7 “erases” most debts.

The home was purchased in 2007, five years after the Chapter 7 was finalized. The nearly 3,300-square-foot, five-bedroom home in Jamestown Hundred was purchased for $428,000, according to county records. The original amount of the mortgage, according to the notice of trustee’s sale, is $342,400. The most recent tax assessment in 2010 puts the home’s value at $358,800.

According to local attorney Susan Tarley of Tarley Robinson, a Chapter 13 filing will stop a foreclosure sale, at least temporarily. “An automatic stay goes into effect upon the filing of a bankruptcy petition, which prohibits all creditors from taking action against the debtor to obtain or enforce a judgment or lien against the debtor or the debtor’s property,” Tarley said.

Should the bankruptcy case be dismissed for any reason, or if the debtor fails to make payments, or if the bank can show there is no equity in the property and the court agrees, then foreclosure might proceed, she noted.

Arch Jones filed for Chapter 7 bankruptcy in June 2002, at which time his debts were discharged, according to court records.

He filed for Chapter 13 for the first time in Virginia in September 2009. The judge dismissed the case because Jones failed to file required documents on time. He filed again in October 2009, and the judge dismissed the case for the same reason, and also because Jones failed to meet with his creditors.

He filed a third time in March 2010; the case was dismissed because documents weren’t filed on time and because he failed to submit his repayment plan in a timely manner.

When the judge dismissed the fourth case, filed in June 2010, he noted that “the Court finds that the debtor is not proceeding in good faith, and that his case should be dismissed with prejudice.” Jones was barred from refilling another petition for 180 days.

Jones filed the most recent petition Friday.

The homeowners association in the Joneses’ Jamestown Hundred community has taken him to court six times since May 2010 seeking payment of debt, according to court documents; the most recent was filed last month.

Aside from the issues relating to the nonpayment of the home mortgage, Mary Jones has also had two warrants in debt (civil claims for money) issued against her within the last year or so – one dating back to January 2011 for $4,102.86, owed to Discover Bank, and one issued in April last year for $1,562.98 owed originally to Chase Bank.

While Jones did not respond to an email from WYDaily Monday afternoon asking whether her husband’s bankruptcy filing has halted the planned foreclosure sale, she told WYDaily in fall 2010, “We’re not immune to the impact of the economy.”

She also said at the time, “I know I have to deal with this in public. It’s an unfortunate position to be in, but we’re human. We’re not the only family that faces these kinds of challenges today… but I was hired to do a job for the citizens of the county, and I’m determined to serve them.”

The company representing the bank in the sale did not respond to a phone call about the upcoming sale, either.

According to Maryland court records, Maryland property management company Hendersen-Webb filed claims against Arch Jones and Mary Jones in October 1998 seeking $2,875.63. The court found in favor of Hendersen-Webb in the claim regarding Mary Jones in August 2003; the status of the complaint is listed as “bankruptcy” regarding the same claim against Arch Jones. The case status is still listed as active.

Read a previous story about the pending foreclosure sale here.

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Occupy DC Helps Grandmother Avoid Eviction, Stay In Her Home

Bernita Jones (Washington Post)

An hour after Occupy DC protesters organized a rally outside Freddie Mac’s offices in downtown Washington, DC yesterday on behalf of a Maryland resident facing eviction, the mortgage giant announced that it had developed plan to keep her in her home.

Bertina Jones, of Prince George’s county, a suburb of DC, was “a perfect example of a woman who was making her payments, and they still foreclosed on her,” said Maryland Legal Aid Bureau’s Vicki King Taitano, who is helping Jones. Jones, a grandmother and accountant, got a mortgage modification in 2009 from Bank of America, “but the bank repeatedly lost the accompanying documents” and Freddie Mac bought the house at 2010 in a foreclosure auction.

Jones has yet to be evicted, however, and Occupy DC rallied to support her after hearing about her case from Taitano. The Washington Post’s Annie Gowen reports:

Jones, who can’t afford a private attorney, said she has been working on her own for months — heading to the law library, making repeated calls and sending e-mails — to try and resolve the situation. It has taken a toll, she said. [...]

After working on her own for so long, she said it was “great” to rally with supporters outside the Freddie Mac government relations offices Monday. The 50 or so Occupier protesters marched in a circle around her, chanting “housing is a right” as she clutched a sign that said “Stop Foreclosures and Evictions Now.”

Occupy protesters across the country have been trying to find a purpose after being evicted from encampments in public parks, and a growing number are finding success with targeted actions like this. Occupy Nashville helped saved the home of civil rights activist Helen Bailey, while activists in Detroit have helped saved at least five homes, and protesters in California camped outside a former Marine’s home to help him fight foreclosure.

Jones’ case also shows how difficult it can be for people to fight mortgage providers — Jones is an accountant who seemed to work hard and do everything right, but still faced eviction. “I’m glad I stood up and fought,” Jones said. “I hope more homeowners will join us. I’m not an icon, I’m just a homeowner trying to save her home.”



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Atlanta Bankruptcy Attorneys Help Homeowners with the Next GA Foreclosure Sale

Bankruptcy is an effective means to stop foreclosure and allow homeowners to stay in their homes.

Atlanta, GA (PRWEB) February 29, 2012

C. Golden Associates is reaching out to homeowners in south metro Atlanta who are in fear of having their homes foreclosed. The next round of GA foreclosure sales is set for March 6, 2012 and time is not on the homeowners side. This Atlanta bankruptcy attorney helps clients by assisting in bankruptcy filing. Bankruptcy provides debt relief enabling clients to catch up on mortgage payments and stops foreclosure all together. The Golden team is working hard to keep homeowners out of the coming flood of Georgia foreclosures.

The main reason that the number of foreclosures is rising again is because a lawsuit that the U.S. Government filed against 17 major banks has recently been settled. These complaints were filed in federal or state court in New York or the federal court in Connecticut. The complaints sought damages and civil penalties under the Securities Act of 1933. The cases are Federal Housing Finance Agency v. Bank of America Corp. (BAC), 11-CV-6195; FHFA v. Barclays Bank Plc., 11-CV- 6190; FHFA v. Citigroup, 11-CV-6196; FHFA v. Credit Suisse Holdings (USA) Inc., 11-CV-6200; FHFA v. Deutsche Bank AG, 11- CV-6192; FHFA v. First Horizon National Corp., 11-CV-6193; FHFA v. Goldman, Sachs Co., 11-CV-6198; FHFA v. HSBC North America Holdings Inc., 11-CV-6189; FHFA v. JPMorgan Chase Co., 11-CV- 6188; FHFA v. Merrill Lynch Co., 11-CV-6202; FHFA v. Nomura Holding America Inc., 11-CV-6201; FHFA v. SG Americas Inc., 11- CV-6203, U.S. District Court, Southern District of New York.

During the lawsuit hearing the major banks drastically reduced the number of foreclosures they were processing. This has caused a major back-log of distressed properties and now that the lawsuit has been settled, the banks are once again moving on with foreclosure proceedings. This is where C. Golden Associates can step in to assist homeowners in filing for bankruptcy. Bankruptcy is an effective means to stop foreclosure and allow homeowners to stay in their homes.

Though bankruptcy is not generally known for stopping foreclosures, it is one of the many benefits of the legal process that homeowners in distress can reap. When you file for bankruptcy an “automatic stay” is put in place to stop all creditors from seeking payment, therefore they cannot repossess assets. Bankruptcy will have a negative impact on credit ratings. However, it is generally not as damaging as undergoing a home foreclosure. C. Golden Associates wants their clients to get the best solution possible to a difficult financial situation and to know that bankruptcy is one of their best options.

C. Golden Associates is known as one of the most compassionate and dedicated firms in Georgia. They truly do go above and beyond the call of duty. The founder of C. Golden Associates, Colleen Golden, has this to say about her firm, “I chose to start this firm because I want all of our clients to know that there is a way out. We are here to make their life better in these troubled economic times. We go out of our way to make sure that our clients are able to afford the benefits of legal representation during bankruptcy proceedings. We offer a great flat rate for clients filing for Chapter 7 bankruptcy and we also provide a no-money-down option for qualified homeowners better suited for Chapter 13. Our office makes evening and Saturday appointments to make sure that everyone is able to get legal assistance when they need it.”

C. Golden Associates recently added a second office to enable the firm to provide service to a larger geographic area. They are located in Fayetteville and Lithonia, Georgia to better serve communities such as Stockbridge, McDonough, Conyers, Covington, Peachtree City and Jonesboro, GA. C. Golden Associates offers flexible payment plans and appointment scheduling to all homeowners in need. They can be reached by phone at (770-720-7220) or by email to answer any questions day or night.



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Stockton aims to avoid being biggest bankrupt city

The city of Stockton in California’s crop-abundant Central Valley has the second-highest foreclosure rate in the nation and one of the highest crime and unemployment rates. It was named America’s most miserable city in a national magazine _ twice.

And now, officials say this river port city of 290,000 is on the brink of insolvency and could become the nation’s largest city to fall into Chapter 9 bankruptcy protection.

The City Council voted late Tuesday to use a new California law to enter mediation with its creditors. City leaders said they hoped the plan to renegotiate Stockton’s debt would help it avoid bankruptcy.

Dozens of residents spoke against the move, saying they feared it would do the opposite, KRCA-TV reported.

“If they vote for mediation, it is the first step towards bankruptcy,” former City Manager Dwane Milnes said. “That means 1,000 people could lose retirement benefits.”

Stockton will be the first city to test the state law, Assembly Bill 506, which is less than 2 months old. It requires local government agencies to undergo mediation or hold a public hearing and declare a fiscal emergency before filing for bankruptcy.

In 2008, Vallejo became the biggest California city to file for bankruptcy, and it emerged from bankruptcy last year.

In recent years, thousands of new homes mushroomed in Stockton, part of a housing boom in suburban development that attracted buyers from the Bay area and beyond.

But when the economy crashed and the construction bubble burst, Stockton was battered by foreclosures and lost income from property taxes and other fees. Multi-year labor contracts with escalating costs added to the burden, forcing officials to make deep emergency cuts to the city payroll, including its police department.

“It’s been so challenging. Since 2008, the whole market was essentially turned upside down,” said Randy Thomas, a Stockton real estate broker with the Cornerstone Real Estate Group. “A lot of folks were losing their homes. A lot of people were getting evicted, and it’s been tough on a lot of people.”

City leaders say Stockton could soon be unable to pay its debts. The city has a $15 million deficit _ $6.6 million from the last fiscal year and $8.7 million expected for the current fiscal year, according to documents.

Forecasts also show deficits ranging from $20 million to $38 million for the fiscal year 2012-2013 and increasing in subsequent years.

Some residents are losing faith.

Marty Carlson, a waitress at Bradley’s American Bistro in downtown Stockton, said business, along with her tips, has been on the decline for years. She’s had enough, she said, and plans on leaving Stockton soon.

“They’re (the city) not the only one going bankrupt,” Carlson said. “It’s time to move on. I’m ready.”


Wozniacka reported from Fresno, Calif.


Follow Gosia Wozniacka at



Stockton Council agenda:

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© 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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How could they quit on Oregon homeowners?

There’s still time if legislators are willing to help people keep their homes

If lawmakers leave Salem having turned their backs on the Oregon families struggling to avoid foreclosure, this session will be a failure no matter what else they do.

Foreclosure reform is that important. One in four Oregon homes is underwater, meaning that owners owe more than their homes are worth. One in four. Nearly 40,000 Oregon homes are in foreclosure or delinquent. And yet the word out of the Legislature on Tuesday was that foreclosure reform — the best chance for many of these families to save their homes — was dead.

That’s outrageous. There are two straightforward, tried and tested, foreclosure reforms stalled in the Oregon House. One would require lenders to meet with distressed homeowners in pre-foreclosure mediation, a practice that has helped reduce foreclosures in other states by as much as 50 percent. The other would stop the cruel practice of “dual tracking” — lenders secretly moving to foreclose at the same time they are supposedly working with homeowners to restructure loans.

These bills passed the Senate with large bipartisan majorities. Twenty-six of 30 senators supported the required mediation. Then the bills moved to the House, and Republican leaders refused to take them up.

Yes, Republicans offered an amended bill. And, yes, there are some appealing elements to it, including the allocation of some $30 million that’s coming to the state from the national settlement with the big banks that exploited or led astray hundreds of thousands of Americans who have lost their houses, and pretty much everything else.

But let’s be clear: House Republicans deserve most of the blame for blocking foreclosure reform in Salem. GOP leaders apparently do not support a strong pre-foreclosure mediation law, one that would require the big banks, the major foreclosing entities in Oregon, to sit across the table from homeowners with a third-party mediator and give them a real chance to save their homes.

The Republicans’ amended bill is all about counseling homeowners and allocating the national settlement money. It wouldn’t compel the banks to the table. It wouldn’t require them to send representatives with the authority to change the terms of loans. It wouldn’t be enforced by the power of the Oregon Justice Department.

That’s not foreclosure reform. It’s a political fig leaf meant as cover for legislators choosing to side with the big banks instead of all those Oregonians trying so hard to keep their homes.

It’s stunning that the same lawmakers who are fighting tooth and nail for a bill that might create a few hundred jobs from clear-cutting more state forests aren’t willing to go to the mat for the thousands of families trying to keep their homes. What’s the most important economic issue here?

Foreclosure reform shouldn’t be caught up in partisan politics. It wasn’t in the Senate. It hasn’t been in other states. Washington, Nevada and 19 others have adopted pre-foreclosure mediation. All the truly effective laws require the lenders to participate.

It’s not that complicated. The Senate approved solid foreclosure reforms. House leaders could move them today, and lawmakers could still pass them before the end of the session. If they won’t, if the banks have their way, more and more Oregonians are going to lose their homes. You’d think everyone elected to serve this state would want to do something about that.

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FHFA chief DeMarco on defensive over refinancing

By Greg Robb, MarketWatch

WASHINGTON (MarketWatch) — The Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac, is already playing a leading role in helping homeowners avoid foreclosure, in contrast to how it is often portrayed, the agency’s acting chief said Tuesday.

Edward DeMarco’s comments came in his testimony to the Senate Banking Committee, where he was grilled about FHFA policy forbidding debt forgiveness, or principal reduction, for homeowners behind on their payments and whose homes are underwater.

California’s attorney general, Kamala Harris, has asked FHFA to suspend foreclosures until the agency completes a review of this stance.
Read ‘California AG seeks foreclosure suspension’


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DeMarco did not address Harris’s letter, but said that FHFA favors principal forbearance rather than principal reduction. Under forbearance, a portion of the debt is suspended until the end of the mortgage or until the house is sold.

DeMarco called principal reduction the least effective tool to assist in the effort to set up an affordable monthly mortgage payment for troubled borrowers. Better options include cutting the interest rate on the mortgage, extending the term of the loan, or forbearance, he said.

Those “three tools work better” than principal reduction, DeMarco said.

In his opening statement, Sen. Tim Johnson, a South Dakota Democrat who is the chairman of the Senate Banking panel, urged the FHFA to “take additional steps to facilitate refinancing for families currently stuck in higher-interest mortgages held by Fannie and Freddie.”

Housing and Urban Development Secretary Shaun Donovan noted that banks are already allowing principal reduction on loans in their own portfolios.

“If banks are doing that with their own portfolios, I think it shows they have clearly made the decision that it protects their own investments,” he said.

“If I look at the range of tools, principal reduction is the one tool that we have made perhaps the least progress on until recently,” Donovan said.

Donovan said the government’s recent $26 billion settlement with five of the biggest banks over foreclosure abuses would also spur more principal reduction.
Read earlier story about foreclosure settlement.

Treasury has recently tripled the incentives for mortgage modifications that include principal reduction in its Home Affordable Modification Program, or HAMP, he said.

The Obama administration has notified FHFA that Treasury would pay these same incentives to Fannie and Freddie if they participate in the program, he said.

In separate testimony, Federal Reserve Board Governor Elizabeth Duke defended her agency’s recent extraordinary focus on housing, saying that the failure of the market to recover is holding back the entire economy.

“The failure of the housing market to respond to lower interest rates as vigorously as it has in the past indicates that factors other than financial conditions may be restraining improvement in mortgage credit and housing market conditions and thus impeding the economic recovery,” Duke said.

The Fed released a paper on the market laying out policy action that Congress could take to help the market, including taxpayer assistance.

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Edward DeMarco Refuses Foreclosure Fix Favored By His Boss, President Obama


High-level efforts to convince federal housing regulator Edward DeMarco to support a foreclosure prevention technique championed by the Obama administration are proving about as effective as sawing off a deadbolt with a plastic knife.

So what to do with an unelected official who won’t bend to the political winds?

At a Senate housing hearing on Tuesday, DeMarco, acting head of the federal agency that effectively controls more than 60 percent of the mortgage market, once again confirmed he does not favor mortgage value write-downs, or principal reductions, for underwater homeowners. Principal reductions are the “least effective tool in the toolbox” for helping homeowners while preserving the assets of Fannie Mae and Freddie Mac on behalf of taxpayers, DeMarco said in a sometimes testy exchange with lawmakers.

Since 2009, DeMarco has run the Federal Housing Finance Agency, which oversees and effectively controls government-backed mortgage giants Fannie Mae and Freddie Mac. Momentum for widescale principal reductions has been building for more than a year, and as part of the recent robo-signing foreclosure settlement, five large banks agreed to write down as much as $20 billion on properties now worth less than their mortgages.

So far, DeMarco has resisted calls from Congress, state attorneys general, and the Obama administration to expand principal reductions to Fannie Mae and Freddie Mac loans.

Last year, the Senate refused to bring to a vote the nomination of Joseph Smith, Obama’s pick to head the agency. (Smith, the North Carolina banking commissioner, will head the effort to ensure that the banks comply with the terms of the foreclosure settlement.)

“All the administration can do is keep pushing,” said Maryland Rep. Elijah Cummings (D), who has also urged DeMarco to change his position, in an interview on Tuesday. DeMarco “has the power.”

California Attorney General Kamala Harris, and some members of Congress, have called on DeMarco to resign. But Rep. Cummings said DeMarco’s resignation may not make things any better for proponents of loan write-downs. That’s because the next agency bureaucrat in the line of succession would take power, not a presidential appointee, he said.

“If he is not going to do principal reduction I’d like to see him go, but that doesn’t mean the next person won’t have the same opinion that he has,” Cummings said.

This leaves the Obama administration with two choices. Keep trying to persuade DeMarco to see things their way, or use a recess appointment to install a permanent director, as Obama did when he appointed Richard Cordray in January as head of the new Consumer Financial Protection Bureau over the strenuous objections of Senate Republicans. This second option was championed last month by a group of 28 legislators, led by California’s Dennis Cardoza (D). Cummings also said he would support a recess appointment.

The White House did not immediately return a request for comment. Appointing someone without the Senate’s consent would surely stir up a hornet’s nest of opposition from Republicans.

In response to a request to interview DeMarco for this story, a Federal Housing Finance Agency spokeswoman referred The Huffington Post to his past statements.

DeMarco has argued that principal reductions would simply expose taxpayers — who have already shelled out more than $160 billion to prop up Fannie Mae and Freddie Mac — to too much risk. Instead, he has said he supports other types of homeowner aid, such as interest reductions, forbearance on making payments, and extending the term of a home loan.

Treasury Department data show that modification efforts that include principal reduction are more likely to prevent default than other loan restructurings. Many leading economists have also supported principal reduction as the most effective tool to keep deeply underwater borrowers out of foreclosure.

Even banks are getting on board. In addition to their obligations under the foreclosure settlement, banks have written down the values of about 20 percent of loans that have received modifications, New Jersey Sen. Robert Menendez (D) said at Tuesday’s hearing.

DeMarco responded at the hearing that many of those loans were purchased on the secondary market at a discount, so the financial institutions making the principal reductions weren’t directly taking the losses.

At Tuesday’s hearing, DeMarco said he agreed with Pennsylvania Sen. Pat Toomey (R) that asking taxpayers to pick up the tab for writing down loans would provide an incentive for the 80 percent of underwater borrowers with a Fannie Mae or Freddie Mac loan who are current on their mortgage to stop making payments. This is the “moral hazard” argument.

Many lawmakers think the moral hazard is in allowing DeMarco to stay.

“‘I think he could do more, but he has chosen to do less,” Cummings said.

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What Do The Republican Presidential Candidates Say On Foreclosure Crisis? Not …


As we’ve detailed, President Obama’s plans to help homeowners have so far come up short time and again. We recently looked at Obama’s latest proposals, most of which are unlikely to make a major dent on the crisis.

So how about the Republican presidential candidates: What do they say should be done about the foreclosure crisis?

They don’t say much. As newspapers in hard-hit states like Florida, Nevada, California, and Ohio have been quick to point out, none of the candidates have made the foreclosure crisis a policy priority.

Mostly, the candidates have argued that the housing market needs to heal on its own, without government interference. A few — Rick Santorum and Congressman Ron Paul — have suggested tax breaks for some homeowners.

Here’s our in-depth guide to how Santorum, Mitt Romney, Paul and Newt Gingrich say they would approach the issue as president — as well as an evaluation of their claims.

Think we missed an important statement? Let us know.

Rick Santorum: ‘Let Capitalism Work,’ But Let Homeowners Write Off Home Losses on Their Taxes

Former Pennsylvania Sen. Rick Santorum has proposed allowing people who owe more on their mortgages than their homes are worth to sell their houses, and then deduct their losses from their taxes.

The details of Santorum’s plan aren’t clear, and the campaign did not respond to our multiple requests for comment.

One tax law expert we spoke to, James Maule of Villanova University School of Law, said that a tax write-off “would not do much for the majority of people who are in financial trouble.”

Right now, if a taxpayer sells her primary residence at a loss, she can’t deduct that loss from her taxes. Changing the tax law wouldn’t do much good, Maule said, because people who are struggling with their mortgages often have little or no income, so giving them a tax deduction actually doesn’t help.

Other than that, Santorum says we just need to “let capitalism work,” as he put it in a Republican debate in Tampa, Fla., on Jan. 23. “Allow these banks to realize their losses. And create an opportunity for folks who have houses to realize their losses and at least help them out.”

Santorum has also said his plan would help the housing market “find its bottom.”

“This is something I think is important temporarily to put in place to allow people the freedom to be able to go out and get out from underneath these houses that they’re holding onto and at least get some relief from the federal government for doing so,” he said at the Jan. 23 debate.

But according to some experts, housing prices might be close to hitting bottom already — and thus already on their way to a rebound.

It’s also worth noting that a 2007 law currently provides a tax exemption for homeowners who negotiate debt relief on their mortgages, including through short sales. It’s unclear whether there might be any overlap between this law and Santorum’s plan.

Earlier, in Nevada, one of the states where the foreclosure crisis has been the most severe, Santorum emphasized “free market solutions” and cautioned citizens against looking to the government for help. According to CNN, Santorum compared the housing crisis to health care, and suggested that, given the opportunity, liberals in government would implement a housing solution like “Obamacare.”

When Santorum and others call for private-sector solutions, they’re largely sidestepping the reality at hand: The mortgage market is already deeply reliant on government support.

Government-owned Fannie Mae and Freddie Mac owned or guarantee roughly half of the existing mortgages in the U.S. And while both the Obama administration and Republicans want to scale back the government’s involvement, it’s actually been getting bigger. Fannie and Freddie now guarantee 3 out of 4 new mortgages. Factor in the Federal Housing Administration mortgages guaranteed by Ginnie Mae, and the percentage of mortgages backed by the government grows even higher.

Mitt Romney: May Be Open to Some Homeowner Aid Programs, But Won’t Talk Specifics

In a videotaped interview with the Las Vegas Review-Journal’s editorial board last October, former Massachusetts Gov. Mitt Romney said his approach to addressing the housing market would be, “Don’t try to stop the foreclosure process. Let it run its course and hit the bottom.”

He said the Obama administration had “slow walked the foreclosure process,” and that the housing market would “turn around and come back up” only when foreclosures went through and the houses were put on the market, sold to investors, and then rented out.

Romney has also said that repealing the Dodd-Frank financial reform law, which introduced new regulations to the mortgage market, would help the crisis.

Economist Elliott Parker of the University of Nevada Reno told us that, while he is not “enamored” with the Dodd-Frank regulation itself, “it is absurd to pretend that repealing Dodd-Frank would work some magic in turning around Nevada’s housing catastrophe.”

“Any time you establish a set of regulations there are unintended consequences,” Parker told the Las Vegas Sun in October. “There may be banks that can’t lend now or some people who can’t get loans. But to offer that as a solution is pretty empty and it completely ignores the magnitude of the problem that we have today,”

Mark Calabria, the director of financial regulation studies at the Cato Institute, pointed out that while he agrees with Romney that the housing market needs to heal on its own, the Obama administration’s general approach to the foreclosure crisis was first developed and instituted by President George W. Bush — so it’s not fair to characterize the administration’s programs to help homeowners as a purely Democratic strategy.

“Both Obama and Bush’s housing policies have had relatively small impact. They certainly have not stopped the price decline. They’ve slowed the rate at which this happened,” Calabria said.

Contacted for comment, a Romney campaign spokeswoman emailed a statement saying, “The only real solution to the housing crisis is to get the economy growing again at a healthy rate.” The spokeswoman did not offer details about what specific plans Romney endorses or opposes.

Despite his “hit the bottom” rhetoric and focus on “private-sector solutions” between banks and homeowners,” some of Romney’s statements suggest that he might actually be open to providing government assistance to homeowners.

As Forbes pointed out recently, Romney was very supportive of Bush’s attempts to aid homeowners in 2008.

“Helping reverse the housing crisis is critical,” he said in 2008, praising George W. Bush’s programs to help homeowners through the Federal Housing Administration. “Loosening those requirements and expanding the ability of FHA to help out homeowners would make a big difference.”

One of Romney’s top economic advisers, economist Glen Hubbard, released a plan in September suggesting that every homeowner with a Fannie Mae or Freddie Mac government-backed mortgage who is current on mortgage payments should be allowed to refinance his or her mortgage at a low rate.

Romney didn’t endorse the plan — but he didn’t reject it, either.

“I think the idea of helping people refinance homes to stay in them is one that’s worth further consideration, but I’m not signing on until I find out who’s going to pay and who’s going to get bailed out,” Romney said in October.

In January, when Romney met with a preselected group of struggling Florida homeowners in Tampa, he called their situations “tragic,” and said that “the banks ought to show greater flexibility in being able to renegotiate with those people who have circumstances that would justify that renegotiation.”

But at the same event, he also defended the banks that foreclose on homeowners. “The banks are scared to death, of course, because they think they’re going to go out of business,” Romney said. “They’re afraid that if they write all these loans off, they’re going to go broke. And so they’re feeling the same thing you’re feeling. They just want to pretend all of this is going to get paid someday so they don’t have to write it off and potentially go out of business themselves.”

Many investors suspect that Romney is right: While banks continue to list mortgage investments on their balance sheets at their face values, investors worry that because of the struggling housing market and high rates of foreclosure, the actual value of what the banks own is actually far less. If true, banks could face big losses.

Other elements of Romney’s defense of the banks’ role in the foreclosure crisis have been more questionable.

“Now, the banks aren’t bad people. They’re just overwhelmed right now,” Romney said at another event in Florida, according to the Los Angeles Times. “They’re overwhelmed with a lot of things. One is a lot of homes coming in, that are in foreclosure or in trouble, and the other is a massive new pile of regulations.”

Banks may be overwhelmed but they also recently agreed to a $25 billion settlement over robo-signing and other fraudulent foreclosure practices. We’ve done extensive reporting on how homeowners have suffered from the banks’ deeply dysfunctional loan servicing practices — practices which continued years after the foreclosure crisis began, in 2007, and long before the Dodd-Frank financial regulations became law in 2010.

Ron Paul: Hands-Off Policy, Except for Tax Benefits for Those Who Lose Their Homes

Like other Republican candidates, Texas Congressman Ron Paul has advocated a hands-off approach to the foreclosure crisis.

“The best thing you can do is get out of the way, because you want the prices to come down so that people will start buying them again,” he said at the Tampa debate in January.

“Any further federal programs designed to fix prices by pumping credit into the housing market will only compound the damage done by prior interventions,” he said in an interview with the Las Vegas Review-Journal.

But Paul also laid out a series of tax benefits that he said would help the residents of Nevada, which is among the states hardest-hit by the foreclosure crisis.

Among these were “providing tax credits to those who have suffered foreclosure” in order to provide an easier path to “new, more affordable housing,” and allowing homeowners “to take a capital loss deduction if they sell a home for less than they paid for it.”

Paul’s campaign did not respond to a request for comment, making it difficult to compare Paul’s and Santorum’s tax deduction plans.

It’s worth noting that Paul — unlike Rick Santorum — did warn about the dangers of the mortgage bubble years before it burst. “Like all artificially-created bubbles, the boom in housing prices cannot last forever. When housing prices fall, homeowners will experience difficulty as their equity is wiped out. Furthermore, the holders of the mortgage debt will also have a loss,” Paul told House of Representatives in 2002, introducing his “Free Market Enhancement Act,” which would have repealed special privileges granted to Fannie Mae and Freddie Mac.

Paul also warned that taxpayers would ultimately be forced to bail out investors. Fannie and Freddie are still more than $150 billion in the red after a taxpayer bailout.

Newt Gingrich: ‘Repeal Dodd-Frank’

Like Romney, former Speaker of the House Newt Gingrich has advocated removing new regulations on the mortgage industry as a way to address the foreclosure crisis.

“If you could repeal Dodd-Frank tomorrow morning, you would see the economy start to improve overnight,” Gingrich said at the January Tampa debate.

He has not offered much beyond that point. His 21st Century Contract with America mentions the housing crisis only in the context of his goals for repealing Dodd-Frank and reforming the Federal Reserve. In a January interview with the Las Vegas Review-Journal, he repeated his debate comments almost word for word, adding, “The No. 1 thing that we can do to help the housing market is to strengthen the overall economy.”

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Foreclosure bill narrowly passes last committee despite some Republican hesitation

TALLAHASSEE — Approval of a Naples lawmaker’s foreclosure bill Monday drew outbursts from a crowd of opponents gathered for a Senate meeting devoted to the legislation, aimed at hastening foreclosure proceedings.

The close affirmative from the Senate panel included hesitation from three Republicans, one of whom voted no. One Democrat voted for the measure.

The 6-4 vote at its last committee stop sends the Senate version of a bill propelled by state Rep. Kathleen Passidomo, R-Naples, to the chamber’s floor.

But it reaches the full Senate at the height of protests from consumer advocates from around the state, who have persistently decried the bill as it advanced through the Legislature. After Senate members asked questions in the 75-minute meeting Monday, little time was left for public testimony.

“They just don’t give the people time to speak,” said Susan Gabel, an Orange County member of PICO United Florida, an organization of religious activists.

When Banking and Insurance Committee Chair Garrett Richter, R-Naples, stopped public input at 5:58 p.m., one woman stormed out of the committee room sobbing and telling a Capitol staffer she was having a panic attack. Several people rushed the floor or shouted.

“We are not angry people,” said Woody S. Ryan, a member of Mortgage Justice, a Sarasota-based group of foreclosure defendants. “We are frustrated with the process. This is such an important issue.”

The legislation, sponsored in the Senate by Sen. Jack Latvala, R-St. Petersburg, would reduce the number of court hearings from two to one and allow anyone who holds a lien, including homeowners associations, to initiate a foreclosure. It would also outline steps for foreclosing on abandoned properties.

With two weeks left in the session, lawmakers who support the bill say Florida needs it to go through. They say the faster homes are returned to the market, the sooner the state’s economy can recover.

Opponents say the bill, which stalled last legislative session, lays the burden of proof on foreclosure defendants and fails to address the problem of lenders stalling the process.

With mortgage fraud rampant in the wake of the housing crisis, critics charge that streamlining foreclosures may hinder the borrower’s ability to make a strong defense and allow lenders to take homes on shaky evidence.

Some senators went along with those arguments. Sen. Steve Oelrich, a Gainesville Republican and former sheriff, voted yes but not before raising several questions about bank fraud.

“I don’t mind being the sheriff, but I don’t want to be the sheriff of Nottingham,” he said.

Sen. Mike Fasano, a St. Petersburg-area Republican who often clashes with his party, voted no. Incoming Senate Minority Leader Chris Smith of Ft. Lauderdale paused before casting the lone Democratic yes vote.

Passidomo repeatedly said her legislation requires lenders to bring documents with them when they initiate the process. She said homeowners with a substantial defense will have the chance to challenge the foreclosure action.

“The court will hear those meritorious defenses, but unfortunately it’s not a meritorious defense to say, ‘I just don’t want to pay,’” Passidomo said.

This was a bottom line for supporters of the measure on the Senate panel.

“It’s not the bank’s fault or the lender’s fault, if you will,” Richter said. “It’s not the lender’s fault when someone loses their job. The mortgage document basically says I promise to pay, it doesn’t say I promise to pay if I’m employed.”

The bill is a year in the making. Passidomo has added one measure intended to help consumers. The provision of the bill would reduce the length of time — from five years to one — that banks can seek payment for the remaining value of the mortgage if a foreclosure sale comes up short.

Though consumer advocates say this is a drastic improvement on current law, they still oppose the fundamental idea of the legislation. Tacit and expressed indications from some of the panel’s Republicans suggest the bill may see amendments on the floor.

“I will move this bill along today if that’s what it takes, but there’s certainly no indication that I would vote for it on the floor until we get some of these questions answered,” said Sen. Mike Bennett, R-Bradenton. “It really bothers me. We should have heard this bill two months ago.”

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Calif. AG wants Freddie, Fannie to halt foreclosures – U

Attorneys General Kamala D. Harris of California, left, and Catherine Cortez Masto of Nevada walk past foreclosure charts of their states after they announce a joint investigation alliance to assist homeowners who have been harmed by misconduct and fraud in the mortgage industry, during a news conference in Los Angeles Tuesday, Dec. 6, 2011. (AP Photo/Damian Dovarganes)
Kamala Harris – AP Photo.

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Download: Harris to DeMarco

California Attorney General Kamala Harris has asked the regulator of mortgage giants Fannie Mae and Freddie Mac to stop foreclosure sales in the state until it reviews whether principal reductions could help homeowners with Fannie- and Freddie-backed mortgages.

Harris made the request to Federal Housing Finance Agency Director Edward DeMarco in a Feb. 24 letter, roughly two weeks after Harris announced her involvement in a historic mortgage settlement between 49 attorneys general and the nation’s largest lenders.

The settlement, which still needs judge approval, could help an estimated 466,000 borrowers in California. However, loans backed by Fannie Mae and Freddie Mac would not be affected by the attorney generals’ mortgage deal.

“You have consistently declined to authorize principal reduction programs by those government-sponsored enterprises,” said Harris in the letter to DeMarco.

Harris’ office estimates more than 60 percent of home loans in the state are owned or held by Fannie and Freddie, a significant portion of borrowers who could benefit from having their principal balances reduced.

The Federal Housing Finance Agency could not immediately be reached for comment.

DeMarco, during an oversight committee hearing hearing on Nov. 16, said the FHFA has concluded that reducing principal balances is “not going to be the least-cost approach for the taxpayer” when compared to other alternative-foreclosure programs including principal forbearance, which “zeroes out the interest rate charged on the underwater portion of the mortgage.”

Fannie Mae and Freddie Mac are government-sponsored enterprises whose connection with subprime mortgages caused their downfall and eventually led to government takeover. They buy mortgages from lenders and sell them to investors on the secondary mortgage market.

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