Securing Judicial Review Under the Administrative Procedure Act of Denials of Modifications of Mortgages Held by Fannie Mae and Freddie Mac

35 Review of Banking & Financial Law 162 (2015-2016)

Indiana University Robert H. McKinney School of Law Research Paper No. 2017-3

62 Pages Posted: 20 Jan 2017 Last revised: 1 Mar 2017

See all articles by Florence Wagman Roisman

Florence Wagman Roisman

Indiana University Robert H. McKinney School of Law

Date Written: January 18, 2017

Abstract

In 2009, the Obama Administration created a program intended to prevent home mortgage foreclosures by allowing modifications of the mortgages. The program was HAMP – Home Affordable Modification Program. HAMP has been a notorious failure, with a July 2015 report stating that only 30% of homeowners who applied for modifications were successful. Although servicer misconduct in administration of HAMP has been rampant, courts generally have not allowed homeowners to secure judicial review of denials of mortgage modifications.

This article advances an argument that has not been made in litigation or commentary: that at least for mortgages held or guaranteed by Fannie Mae or Freddie Mac (which comprise more than half the mortgages in the U.S.), judicial review of modification denials is available under the Administrative Procedure Act (APA). This is the case because before HAMP was created, Fannie and Freddie had been put into conservatorship by the Federal Housing Finance Agency, which unquestionably is subject to the APA and is in total control of every aspect of the activities of Fannie and Freddie. Thus, the denials are final agency action subject to judicial review.

Keywords: housing, HAMP, FHA, mortgage crisis, mortgage, Fannie Mae, Freddie Mac, foreclosure, Home Affordable Modification Program, Administrative Procedure Act

JEL Classification: K11, O18, G21, G18, R38

Suggested Citation

Wagman Roisman, Florence, Securing Judicial Review Under the Administrative Procedure Act of Denials of Modifications of Mortgages Held by Fannie Mae and Freddie Mac (January 18, 2017). 35 Review of Banking & Financial Law 162 (2015-2016); Indiana University Robert H. McKinney School of Law Research Paper No. 2017-3. Available at SSRN: https://ssrn.com/abstract=2901543

Florence Wagman Roisman (Contact Author)

Indiana University Robert H. McKinney School of Law ( email )

530 West New York Street
Indianapolis, IN 46202
United States
317-274-4479 (Phone)

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