AN EMERGENCY FEDERAL MORATORIUM ON HOME FORECLOSURES
Must Be Part of the U.S. Take Over of Fannie Mae & Freddie Mac

Letter to:
James Lockhart, Director, Federal Housing Finance Agency and Fannie Mae and Freddy Mac Conservator
Senator Christopher Dodd, Chairperson of the Senate Banking Committee
Representative Barney Frank, Chairperson of the House Finance Committee

September 14, 2008

We the undersigned understand that the Senate Banking Committee has scheduled hearings on the federal government’s takeover of Freddie Mac and Fannie Mae in Washington DC on Tuesday, Sept. 16, and that the House Finance Committee has scheduled hearings on Thursday, Sept 25th.

On Wednesday Sept 17 and Saturday Sept 20, homeowners and activists will be demonstrating in Lansing, Michigan, Los Angeles, CA, and Boston, Massachusetts, in support of legislation or executive action at the state level which would enact an emergency moratorium on home foreclosures. However, clearly it would be preferable for a moratorium on foreclosures to be enacted on a national basis. All three demonstrations will be raising the demand for a national, federal moratorium on foreclosures.

As people who are both directly affected by the greatest home foreclosure crisis since the Great Depression, and working with many others affected by the national foreclosure nightmare, we urge you and all others in the government who have a voice in this matter to implement an immediate Federal Moratorium on all home foreclosures for the duration of this crisis.

The takeover of Fannie Mae and Freddie Mac by the federal government is a de facto declaration of a State of Emergency by the federal government, brought on by the foreclosure epidemic.

The federal government now holds or insures the majority of the country’s mortgages. Under current U.S. law, when there is a federal declaration of a State of Emergency, there is an automatic mandatory 90 day Moratorium on Foreclosures on all FHA-insured homes. This mandatory Moratorium on Foreclosures is outlined in the U.S. Department of Housing and Urban Development (HUD) Handbook 4330.1 REV-5 and also in the HUD Mortgagee Letter 2005-33, dated August 31, 2005. Most recently, a Moratorium on Foreclosures was implemented in areas affected by Hurricane Gustav. The 90 day foreclosure moratoriums have often been extended until the crisis subsides.

Likewise, the first action of the Federal Housing Finance Agency (FHFA), the agency set up to take over and/or insure all Fannie Mae and Freddie Mac mortgages, should be to automatically impose a moratorium on foreclosures of mortgages held or insured by this new agency. Such an action, mandated under federal law, would ensure that the benefits of the takeover extend to the real victims of this crisis, the homeowners entering foreclosure nationwide.

If the U.S. government can bail out Wall Street banks and take over the two largest mortgage institutions, which will cost taxpayers hundreds of billions of dollars and put the U.S. government in more or less direct control of the entire mortgage industry, why can’t it stop between 8,000 and 9,000 families from losing their homes to foreclosures every single day?

As you know, the foreclosure crisis has long since reached beyond its original subprime mortgage holders. Today almost 10% of all who hold mortgages are threatened with foreclosures. The legislation that Congress passed this summer merely promises help to those lenders who voluntarily agree to re-negotiate mortgages. This measure will only save a relatively few homes.

It’s highly doubtful that any of the bankers that are being bailed out by the government were ever in danger of literally losing the roof under which they and their families sleep. Instead it is ordinary working people who are finding out daily what it is like to lose that roof.

We say enough is enough. We urge you and all others to act on behalf of the people and enact a moratorium now on all foreclosures.

Sincerely,

John Parker, Labor/Community Coalition to Stop Foreclosures & Evictions/California
Rosie Martinez, chair of SEIU Local 721 Latino Caucus and Executive Board Member/California
Miya Campbell, Women’s Fight Back Network, Boston, Massachusetts
Jerry Goldberg, Esq., Moratorium Now Coalition, Michigan
Sharon Black, Nat’l Network to Stop Foreclosures and Evictions