Fannie Mae (FNMA.OB) and Freddie Mac (FMCC.OB) are hindering the efforts by the government to reduce debt reductions for homeowners (NYSE:IYR). For instance, Arizona says they will pay half up to $50,000 of a $100,000 loan reduction. Most banks are refusing.
Since September 2010, only three homeowners have been accepted for debt reduction. The major obstacle being that Fannie Mae and Freddie Mac won’t participate.
John Taylor, president of the National Community Reinvestment Corporation said, “It’s sinful, is the word I would use, that they won’t do this…And the only reason they won’t is they don’t want to realize the red ink that’s already on their books.”
Fannie’s (FNMA.OB) stock is up 6.38% to $0.250 on the news. Shares are down 16.67% year to date. The stock has traded in a 52-week range between $.21 and $.96. Freddie’s (FMCC.OB) stock is up 5.60% to $0.264 on the news. Shares are down 13.39% year to date. The stock has traded in a 52-week range between $.13 and $1.00.