Information is sought on the mortgage giants’ roles as landlords who own thousands of foreclosed properties in California. Also sought are details of their mortgage-servicing and home-repossession practices, a source says.

LA Times-

Investigators with the California attorney general’s office have subpoenaed information from mortgage titans Fannie Mae and Freddie Mac as part of a wide-ranging inquiry into lending and foreclosure practices in the state.

The subpoenas ask the government-controlled finance companies to answer a series of questions about their activities in California, including their roles as landlords who own thousands of foreclosed properties. The attorney general’s office is also seeking details of Fannie and Freddie’s mortgage-servicing and home-repossession practices, according to a person familiar with the matter.

In addition, investigators want to learn more about the companies’ purchases and sponsorship of securities holding “toxic mortgages” in the Golden State, said the person, who was not authorized to speak on the matter and requested anonymity.

[LA TIMES]

From DBR’s Paola Iuspa-Abbott [link]

The law would create an “alternative foreclosure procedure” that lenders could impose on owners of non-homesteaded properties with values far below their mortgages or properties the lender deems to be abandoned.

Under the proposed procedure, delinquent owners would waive their rights to defend the foreclosure, allowing the lender to more quickly obtain a summary judgement to auction the property.

The owners would have 30 days from the date of the foreclosure filing to opt-out of the streamlined procedure. If they do object, the owner would have the right to fight the lender.

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