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Fannie Mae must stop bankrolling lawsuits against homeowners (Rep. John Conyers)

by Rep. John Conyers (D-Mich.) - 09/01/10 7:26 PM ET

To
date, the federal government has purchased nearly $143 billion in stock in
these two companies, with pending requests from Fannie Mae to Treasury to
purchase an additional $1.5 billion and from Freddie Mac for $1.8 billion. This
is fast approaching the combined government and Federal Reserve bailout of AIG.
Once these transactions are completed, the American taxpayers will hold $150.2
billion in stock from these two companies. And, this is not expected to be the
sum total of these efforts, as the Obama Administration stated in December of
2009 that it will extend an unlimited line of credit to these “too big to fail”
behemoths for three more years.

So
what do the American people get for investing $86 billion and owning an 80
percent share in Fannie Mae? Have many millions of homeowners who are delinquent
on their Fannie mortgages been helped? Has Fannie devised a method or a path to
prevent the estimated 13 million foreclosures that will occur over the next
five years?

Unfortunately,
Fannie has decided to go down a different, far less productive path. It
recently announced that it will sue underwater homeowners who “strategically
default” on their mortgage payments.

That’s
right – Fannie is proposing to spend your taxpayer dollars to sue underwater
homeowners.

A person
facing foreclosure shouldn’t be threatened with taxpayer-funded lawsuits during
one of the most difficult moments of his or her life. That is why I’ve written
a letter with my colleagues, Reps. Marcy Kaptur (D-Ohio), Raul Grijalva
(D-Ariz.), Steve Cohen (D-Tenn.), Zoe Lofgren (D-Calif.), Barbara Lee
(D-Calif.), and Mike Honda (D-Calif.), asking Secretary Geithner and FHFA
Acting Director Demarco to exercise the federal government’s authority as
Fannie Mae’s conservator to suspend the implementation of this policy until
Fannie, the Administration, and the Congress, seriously consider the many
problems associated with this policy and determine whether it conflicts with
the Administration’s efforts to help keep homeowners in their homes.