(2 pm. – promoted by ek hornbeck)
From Glen Ford at the Black Agenda Report
President Obama must fire Federal Housing Finance Agency acting director Ed DeMarco because he “has flatly refused to do any kind of principal reduction for the millions of ‘underwater’ homeowners that are suffering, that are drowning in debt because of how the banks crashed the economy,” said Tracy Van Slyke, co-director of New Bottom Line. The coalition of faith-based and community organizations demand a “minimum of $300 billion in principal reduction.” Van Slyke claims New Bottom Line and other Occupy Wall Street-related efforts have “moved the administration far along from where they were. We have moved the dial.”
The Obama administration has repeatedly refused to spend moneys a set aside for distressed homeowners and communities. Why? Because banks have refused to cooperate with such programs, fearing that intervention in the housing market “would threaten to upset the bankers’ carefully calibrated market manipulations.” They would rather continue rigging the game. “The banks have been carefully dribbling out houses for sale, attempting to artificially stabilize prices with the goal of pumping up another bubble.”
The Obama administration’s failure to spend almost any of the $7.6 billion in TARP housing money set aside for the neediest regions of the country seems counterintuitive [..]
The Hardest Hit Fund was specifically targeted to homeowners in areas most seriously impacted by unemployment and falling home values – a formula tailor made for Black and Latino communities devastated by massive foreclosures and layoffs. [..]
The problem was, Obama’s people resisted putting the program into effect. [..]
The problem begins at the top. Obama has consistently protected bankers’ rights to deal with homeowners as they please.
AS reported in the Washington Post: Fannie Mae had seen benefits to lowering some home loans, documents indicate:
Officials at government-backed mortgage giant Fannie Mae concluded years ago that the company could “reduce its losses substantially” by lowering loan amounts for some troubled borrowers, according to internal documents cited Tuesday by the top Democrat on the House oversight committee.
The new insights into Fannie Mae’s analyses about the potential benefits of so-called principal reduction surfaced in a letter from Rep. Elijah E. Cummings (D-Md.) to Edward J. DeMarco, the acting director of the independent agency that oversees Fannie Mae and Freddie Mac.
Since being appointed head of the Federal Housing Finance Agency (FHFA) in 2009, DeMarco has refused to allow Fannie and Freddie to write down loan balances, in part because he worries that some homeowners would stop paying their mortgages to get relief, ultimately costing taxpayers more money. He has been steadfast in his disapproval in recent months despite growing pressure from Obama administration officials and House Democrats to allow principal reductions.
Those “internal documents” led to accusations that DeMarco, a Republican career public servant appointed by Obama to head the FHFA, withheld information from Congress about the findings:
“This just adds to the pile of evidence that calls into question how sincere DeMarco is about treating this issue seriously,” said Ian Kim, director of campaigns for Rebuild the Dream, a progressive advocacy group that has been urging a principal reduction program.
Supporters of principal reduction argue that it would reduce foreclosures by lowering the monthly payments for underwater homeowners and giving them hope they would one day have more equity in their homes.
Opponents counter that reducing the principal on mortgages owned or backed by Fannie and Freddie could increase their losses and encourage homeowners who are making payments to fall behind in order to lower their debt.
The new documents contradict DeMarco’s congressional testimony in November that analyses by Fannie and Freddie concluded that other forms of homeowner assistance were less costly to taxpayers, the lawmakers said. [..]
The failure to launch a principal reduction program “was not merely a missed opportunity, but a conscious choice that appears to have been based on ideology rather than Fannie Mae’s own data and analyses,” the lawmakers said.
It’s time for DeMarco to go and the Obama administration to stop protecting the bankers who won’t support him ever.
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