Regulator Balks at California Foreclosure Fixes
The housing regulator for mortgage-giants Fannie Mae and Freddie Mac on Tuesday said laws under consideration in California to halt illegal foreclosures could restrict mortgage credit and hamper necessary home seizures.
In a letter to California legislators, the Federal Housing Finance Agency disclosed concerns with a measure to increase civil penalties for so-called “robosigning” of mortgage documents and a proposal that attempts to protect delinquent borrowers from losing their homes.
The term robosigning describes the practice of bank workers signing off on foreclosure documents en masse without verifying information in the paperwork.