Sept. 11 (Bloomberg) — U.S. Senate Banking Committee members urged Fannie Mae and Freddie Mac, the mortgage companies placed under federal control this week, to freeze foreclosures on loans in their portfolios for at least 90 days.
“This action would provide immediate relief to many homeowners” and let the companies “turn these non-performing loans into performing assets to minimize losses,” Senators Charles Schumer, Robert Menendez and other panel Democrats said today in a letter to the companies and the Federal Housing Finance Agency, which is overseeing them under the government conservatorship. The companies also should ease their policies on modifying mortgages, the senators wrote.
This action would merely prolong the time it takes the housing market to make a bottom. This is also why it is a bad idea for the government to own these companies. Politicians cannot help but meddle and it will just make it that much harder to run these things competently.