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BOSTON – Attorney General Martha Coakley has sued the Federal Housing Finance Agency and the mortgage giants Fannie Mae and Freddie Mac for violating the state’s 2012 foreclosure-prevention law.
The complaint alleges that Fannie Mae and Freddie Mac, currently under FHFA conservatorship, refuse to comply with the August 2012 Massachusetts law that prohibits creditors from blocking home sales to nonprofits simply because the nonprofit intends to resell the property back to the former homeowner.
In a news release, Coakley cited the Boston Community Capital’s Stabilizing Urban Neighborhoods initiative. As part of the program, the organization buys foreclosed, bank-owned homes at their present market value and sells the properties back to the original homeowners if they qualify for affordable financing. Buyback programs such as the initiative prevent needless displacement of families that through an arrangement with a nonprofit can afford to stay in their homes. Fannie Mae and Freddie Mac have continued to block buybacks even though they lose money in the process. •