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  • Massachusetts Sues Fannie and Freddie Over Foreclosure Resale Rules

    houseonhandOver the past six years the United States has attempted to put its real estate house back in order. But a number of contravening factors, including reduced lending by mortgage lenders, record foreclosures, and a hesitancy by the public to enter the real estate market, have slowed these efforts. Also, authorities have had a difficult time presenting the public with a unified narrative explaining the country’s real estate situation. And as stories regarding foreclosures continue to trickle out, many of them seem to undermine news of a potential real estate rebound.

    The state of Massachusetts has recently filed suit agains mortgage giants Fannie Mae (FNMA) and Freddie Mac (FMCC) for failing to follow a state law which allows nonprofits to purchase foreclosed homes and sell them back to their owners. At issue is the fact that the mortgage companies require the nonprofits, which purchased the foreclosed homes, to resell them at the full amount of the mortgage or at the property’s fair market value, whichever is higher. However, the state sponsored plan allows the nonprofit to sell the home at the lower price. Massachusetts Attorney General Martha Coakley, who filed the lawsuit, says it makes no sense that the federal government would stand in the state’s way as it attempts to help struggling homeowners.

    This situation is just the latest example of the need for a unified front, across federal, state, and local governments, to help bring the country all the way back from the depths of the real estate crisis. But, if the Massachusetts lawsuit is any indication, it may be that different government agencies have differing agendas, preventing their working together seamlessly.

    For more from Bloomberg, click here.

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