Fannie, Freddie and FHA Finally Increase Homeowners' Ability to Modify Mortgages

Once private companies whose stock was publicly traded, in September of 2008 when their increasingly dire financial condition could no longer be ignored, both Fannie and Freddie were taken over by the government and placed into conservatorship. Today, the Federal Housing Finance Authority ("FHFA"), who also regulates the 12 Federal Home Loan Banks, is Fannie and Freddie's "conservator," having assumed the power of the Board and management at both organizations.

Last year, the FHFA became a hated household name when the agency's acting director, Edward DeMarco, under intense pressure from The White House, Treasury, members of Congress, and others, refused to allow Fannie or Freddie to participate in programs that would allow homeowners facing foreclosure to receive principal reductions. When DeMarco announced that he would be stepping down this year, it was almost as if an audible cheer could be heard coming from those in the states "hardest hit" by foreclosures from coast-to-coast.''