Senator Elizabeth Warren and Representative Michael Capuano, both Democrats from Massachusetts, led a protest rally in Washington, D.C., on Wednesday to urge Fannie Mae, Freddie Mac, and HUD to stop selling deeply delinquent mortgage loans to private equity firms. Warren and Capuano are trying to prevent the delinquent mortgage loans from being acquired by investors who are quick to foreclose on them. The lawmakers would rather see the loans acquired by non-profits who would be more likely to engage in the loss mitigation process with borrowers and prevent foreclosure.
Warren and Capuano along with other stakeholders, including leaders from community non-profit organizations, met with FHFA Director Mel Watt and HUD Principal Deputy Assistant Secretary Ed Golding in Washington on Wednesday to discuss the matter. Golding said, quote, This meeting offered an important, constructive and meaningful opportunity to discuss broad goals we support with these community leaders. We will continue to explore all responsible options to avoid unnecessary foreclosures while keeping FHA healthy and available for future generations of homeowners. Close quote
While student loan debt does play a role in the low homeownership rates among millennials, it does not fully explain why this generation is slow to purchase a home, according to Freddie Mac's monthly Insight & Outlook for September released Wednesday. Freddie Mac Chief Economist Sean Becketti said, quote, The low homeownership rate among millennials is still something of a puzzle—it cannot be explained solely by the increase in student loan debt. Close quote