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NY attorney general joins call for changes at FHFA

New York Attorney General Eric T. Schneiderman and Massachusetts Attorney General Martha Coakley are leading a nine-state coalition demanding new, permanent leadership at the Federal Housing and Finance Agency, the agency that oversees Fannie Mae and Freddie Mac.

In a letter to the president and congressional leaders, the attorneys general said that under the current leadership of the agency’s acting director, Edward DeMarco, Fannie Mae and Freddie Mac have been a “direct impediment” to economic recovery by the continued refusal to give principal relief for struggling homeowners.

DeMarco was an appointee of former President George W. Bush.

Last year, Schneiderman led the negotiation of a National Mortgage Settlement under which the five largest mortgage servicers agreed to a $25 billion penalty under a joint state-national settlement structure.

A minimum of $17 billion goes directly to borrowers nationally through a series of homeowner relief efforts, including principal reduction. Servicers have also committed $3 billion to an underwater mortgage refinancing program for homeowners whose mortgages are worth more than the value of their homes.