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Illinois Attorney General Wants to Help Homeowners Facing Foreclosure

Posted on in Bankruptcy

Attorneys General from over ten states including Illinois have penned a letter to theFederal Housing Finance Agency to encourage loan giants Freddie Mac and Fannie Mae to reduce loan principals for homeowners who are struggling to avoid foreclosure on their homes.

The letter states that by using principle forgiveness, the cost to investors and banks would be minimal. Despite a statement in January by Federal Housing Finance Agency head Edward DeMarco that principal forgiveness would result in a burden to tax payers, the coalition of Attorneys General argue that forgiveness could result in savings of almost $1.7 billion.

As Freddie Mac and Fannie Mae own the majority of home loans in the United States, the letter urges them to act as a leader in principal forgiveness, rather than a hindrance in restarting the economy.

The attorneys further argue in the letter that increasing incentive payments to investors under the Home Affordable Modification Program (HAMP) would help ally concerns that forgiveness would negatively impact Freddie Mac and Fannie Mae. While many lenders have complained that participating in in forgiveness would involve costly changes to existing computer programs, the recent Foreclosure Settlement proves that lenders are capable of handling any resulting changes in their existing programs and procedures when dealing with home mortgages.

Despite a concerted effort by public officials to help homeowners facing foreclosure, thousands of Illinois residents continue to struggle with debt. These Chicago homeowners should consult an experienced Chicago foreclosure defense attorney to discuss how to stop a potential foreclosure, or whether filing for bankruptcy could be the best choice for their situation.

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