BOSTON (AP) — Attorney General Martha Coakley is threatening to sue the Federal Housing Finance Agency for refusing to recognize a state program designed at helping stem foreclosures in Massachusetts.
Coakley said mortgage giants Fannie Mae and Freddie Mac, currently under the control of the agency, have refused to comply with the 2012 Massachusetts law which allows the sale of homes in foreclosure to nonprofits whose goal is to keep homeowners in their homes.
The nonprofits typically try to purchase the foreclosed home from the bank at its current market value and restructure the loan to sell it back to the former homeowner.
Coakley said Wednesday that the arraignment benefits both the homeowner and the banks by straightening out the financing.
A spokeswoman for the FHFA said they’ve received Coakley’s letter and will respond