Dems Seek GSE Foreclosure Moratorium

Four Democratic senators are calling on Fannie Mae's and Freddie Mac's new chief executives to declare a moratorium of at least 90 days on all foreclosure proceedings and urging them to establish aggressive loan modification programs now that the two mortgage giants have been placed in conservatorship. "This action would provide immediate relief for many homeowners and, as importantly, give each GSE a further opportunity to turn these non-performing loans into performing assets to minimize losses," the senators say in a letter to Fannie CEO Herb Allison and Freddie CEO David Moffett. Sens. Charles E. Schumer (N.Y), Robert Menendez (N.J), Sherrod Brown (Ohio), and Robert P. Casey Jr. (Pa.) also addressed the letter to Federal Housing Finance Agency Director James Lockhart, the government-sponsored enterprise regulator who is overseeing the conservatorships. The four Senate Banking Committee members argued that Fannie's policy of allowing modifications only after a loan is 120 days delinquent is counterproductive. "Though [Fannie's] introduction of the HomeSaver program has brought some relief, a true loan modification remains far more preferable to an additional loan to a delinquent borrower," the Sept. 11 letter says.