Harris is asking Fannie Mae and Freddie Mac to stop all home foreclosures for now. It would be a massive move, because between them, they own more than 60 percent of California mortgages.
Earlier this month, Harris secured for California $18 billion out of a $26 billion settlement with five banks, to help underwater homeowners. Most of the money is slated to reduce the mortgage principle for underwater homeowners. Fannie and Freddie have so far balked at doing the same.
Harris has written a letter to the Federal Housing Finance Agency -- which oversees Fannie and Freddie. Before foreclosing on another home, she wants the agency to do a full analysis -- and figure out if principle reduction would really help homeowners and save taxpayer money. She says the homeowners deserve at least that. Apparently, the agency has responded to the letter, but we don't yet know what that response said.
The acting director of the agency, Edward Demarco, is already an embattled figure. Harris has previously asked him to resign. And, 110 members of Congress have signed a letter asking Demarco to reconsider his position against reducing mortgage principles.
