Today, we are calling on the acting head of the Federal Housing Finance Agency, Edward DeMarco, to either move or be removed: Stop standing in the way of the mortgage relief millions of homeowners need.
Join us by sending a message to DeMarco: Allow sensible mortgage reductions for the millions of people with underwater mortgages or step aside for someone who will.
Tell Edward DeMarco, the acting head of the Federal Housing Finance Agency, to help underwater homeowners — or step aside for someone who will. Send the message »
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Right now close to three out of every 10 homeowners are underwater on their mortgages — they owe more than their home is worth. If you’re one of those three—or know someone who is—you know an underwater mortgage is like an anvil chained to your leg, holding you down financially.
Worse, these homeowners can’t take advantage of lower interest rates, and as more of them are forced into foreclosure, the values of other homes in the neighborhood are dragged underwater as well. Multiply that by millions and you have an entire American economy struggling to stay afloat.
That’s why Federal Reserve governors and leading economists conclude that reducing underwater mortgage principals to what the homes are actually worth is essential if we are to revive the economy and improve the finances of millions of families.
But Edward DeMarco is standing in the way, refusing to authorize mortgage write-downs. As the acting director of the Federal Housing Finance Agency, he oversees Fannie Mae and Freddie Mac, the two giants that own or guarantee more than 50 percent of all mortgages in the country. DeMarco is a Bush holdover, still in office only because Senate Republicans wouldn’t allow a vote on the person President Obama wanted as his replacement.
DeMarco is said to be “philosophically opposed” to the idea of Fannie Mae and Freddie Mac doing mortgage write-downs. This makes no sense, for write-downs —by the agency’s own reports—would save taxpayers $28 billion compared to the cost of foreclosures. Plus, they would help revive the economy. (Our fact sheet offers more details on DeMarco’s actions and the case for principal reduction.)
“For several years, economists and experts on the housing and securities markets have called for targeted write-downs in the balances of mortgage principal owed by some underwater homeowners,” the letter reads. “Despite this weight of expert opinion, you have refused to permit Fannie Mae and Freddie Mac to write down the principal balances of any underwater mortgages, even in cases where it can be demonstrated that doing so would yield the greatest long-term savings for taxpayers. … Your unilateral decision to block all forms of principal write-down has prevented the housing market from recovering more quickly.”
The co-chairs of the congressional Progressive Caucus, Reps. Raul Grijalva and Keith Ellison, have also sent their own letter calling on DeMarco to support principal reduction.
“Underwater homeowners need justice,” Grijalva and Ellison said in their letter. “Write-downs are about keeping families in their homes and saving taxpayers money by preventing foreclosures. Simple, straightforward principal reductions are a good way to prevent the foreclosure crisis anchor from dragging down the U.S. recovery.”
Republican senators, meanwhile, are protecting DeMarco. Perhaps that’s because they need a poor economy to beat President Obama this fall. And DeMarco is helping by blocking common-sense refinancing and principal reduction. His refusal is costing taxpayers and homeowners $28 billion, according to one of the Federal Housing Finance Agency’s own studies, disclosed in a letter by Reps. Elijah Cummings and John Tierney. Meanwhile, DeMarco has even allowed Fannie and Freddie to make bets that the value of their mortgages would decline.
We can’t let Edward DeMarco drag millions of homeowners and the entire economy underwater. Make sure DeMarco gets the message: Support mortgage write-downs for struggling homeowners—or make way for an appointee who will.