Bondi and several attorneys general from other states say principal reduction oversteps the mission of the group that is negotiating with the five banks, and she fears it could turn into a free-for-all of underwater homeowners. The Mortgage Foreclosure Multistate Group should stick to addressing the wrongdoings of loan servicers, she said, instead of trying to dictate how lenders modify problem home loans.
Pushing lenders to forgive part of their mortgage holders’ debt could encourage even responsible homeowners to stop making payments on their loans, in the hope they can eventually get their bank to erase part of their mortgage, Bondi wrote in a recent letter to the head of the working group.
“Some homeowners may simply default on their loan and use the States’ agreement to obtain a principal reduction — whether or not they actually made an effort to maintain their mortgage,” wrote Bondi, who serves on the negotiating group’s executive board.
She called it a potential “moral hazard” that “rewards those who simply choose not to pay their mortgage — because they can simply take advantage of lenders‘ obligation to honor virtually automatic principal write-downs.”
About The Hut Master
- The Hut Master
- The Hut Master protects Homeowners against the SCUMBAG CRIMINAL BANKSTERS (SCB's). Using his expertise in Electrical Engineering and Computer Sciences, The Hut Master has developed a computerized system coupled with relations with Treasury, Fannie, and Freddie. That combination results in our ability to provide the Homeowner with the analytics and NPV model to hold the SCB's to the HAMP Program Directives. Our software and analytics also prevents the SCB's from playing their silly games that include losing paperwork and just flat out LYING to the Homeowner. The Hut Master also minored in Psychology which provides a useful analytic when speaking with the SCB's. This allows the Hut Master to detect and offset any BullShit the SCUMBAG CRIMINAL BANKSTERS can dish up.
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