Civil Rights and Consumer Groups Respond to Takeover of Fannie Mae and Freddie Mac
9/12/2008
Source: PRNewswire-USNewswire

WASHINGTON, Sept. 12 /PRNewswire-USNewswire/ -- The federal government announced over the weekend its takeover of Fannie Mae and Freddie Mac. The following civil rights, consumer and housing groups made this statement:

Housing is the key to a strong economy, as we can see by the state of
our nation today. Although the government has taken over Freddie Mac and
Fannie Mae, it is vital that Congress and the Conservator not lose sight of
the GSEs' fundamental purpose, as chartered by Congress, to expand
homeownership opportunities and promote access to credit to under-served
markets. This purpose continues to be of vital importance.

Private companies that originate mortgages for sale to Wall Street have
demonstrated that they will not provide sustainable, quality credit to low-
and moderate-income consumers and to under-served markets. While the
private securitization market claimed to be fulfilling an unmet need, it
adopted practices that were detrimental to under-served markets and
ultimately to the entire global economy.

Under the conservatorship, the government has the ability to stabilize
our economy and communities devastated by unscrupulous and irresponsible
lending practices. To accomplish this, the government and the GSEs should:

-- freeze foreclosures for a substantial period of time on all whole
loans in their portfolios to allow for modification;

-- modify existing mortgages likely headed for default by removing
these loans from their securitized pools, without waiting for the loan to
become delinquent, and modifying them to avoid unnecessary foreclosures;

-- maintain affordable housing goals;

-- make a concerted effort to work with lenders, servicers and rental
management companies to stop evictions of tenants in foreclosed units;

-- maintain affordable housing programs, particularly the Housing Trust
Fund and the Capital Magnet Fund enacted by Congress in July;

-- develop new underwriting criteria for underserved borrowers who do
not meet FHA or prime criteria in order to offer them affordable housing
loan products;

-- make fair housing compliance a mainstay of the markets and the GSEs'
practices.

As our leaders work to stabilize the housing market, speed economic
recovery, and open the benefits of homeownership to working families, the
public missions of Freddie and Fannie must be kept front and center.

Association of Community Organizations for Reform Now (ACORN)
CDFI Coalition
Center for American Progress Action Fund
Center for Responsible Lending
Consumer Action
Consumer Federation of America
Consumers Union
Lawyers' Committee for Civil Rights Under Law
Leadership Conference on Civil Rights
National Association of Consumer Advocates
National Association of Neighborhoods
National Consumer Law Center (on behalf of its low income clients)
National Council of La Raza
National Low Income Housing Coalition
National Fair Housing Alliance
National Policy and Advocacy Council on Homelessness
Rainbow PUSH Coalition
U.S. PIRG