START A PETITION 27,000,000 members: the world's largest community for good
START A PETITION
x
2,068,309 people care about Politics

Activists Demand Obama Fire Housing Head

Activists Demand Obama Fire Housing Head

In a major step towards helping ailing homeowners, the two behemoths of Fannie Mae and Freddie Mac concluded that it makes “good financial sense” to write down underwater mortgages. Democrats and activist organizations have pushed this message for quite a while yet find a foe in the administration.

Interim head of the Federal Housing Financing Agency, Edward DeMarco, disagrees with the idea and is currently blocking it. New Bottom Line calls him a career bureaucrat and notes that he is a holdover from the Bush Administration.

As a result, the organization is pushing for President Barack Obama to fire him.

“With eleven million homeowners owing more than their home is currently worth, principal reduction is not only the best option to keep families in their homes. It also makes good financial sense: reducing principal will not only put money back into communities, but it will also reduce the number of people who simply give up and walk away from an underwater mortgage,” says New Bottom Line.

Some economists call principal reduction a game changer.

“Principal reduction works,” says Mark Zandi, chief economist of Moody’s Analytics. “If someone gets a reduction in their principal amount, it gives them a powerful hook to really fight to try to hang on to the home and not go into foreclosure.”

It could mean relief for a half million families. Others agree with DeMarco and do not want to see it happen.

“I think DeMarco is absolutely right,” says Anthony Sanders, a professor at George Mason University. He says that if Fannie and Freddie start forgiving big chunks of what many people owe on their mortgage, they risk triggering a huge wave of strategic defaults. That is, people who don’t really need the help would default on purpose to try to get it.

The thinking from Sanders is almost Ayn Randian in that people are parasites on the system. But nearly 15 percent of all recent loan modifications have involved principal reduction and yet Sanders’ fears are unfounded.

DeMarco claims to be protecting the interest of the taxpayer, since the federal government bailed out Freddie Mac and Fannie Mae. This short-term thinking ignores the problem of forcing more homeowners out and the further worsening of the housing market with more foreclosures.

Rose Gudiel shared her story earlier this month outside of the U.S. Capitol building.

Related Stories:

Write Down Mortgages, Says Progressive Caucus

$26 Billion Foreclosure Settlement: Good News?

Cash-Starved States Look To Foreclosure Settlements For Relief

Read more: , , , , , , , ,

Photo by TheTruthAbout

have you shared this story yet?

some of the best people we know are doing it

7 comments

+ add your own
3:09PM PDT on Mar 30, 2012

Did bush apoint this guy ???

9:46AM PDT on Mar 30, 2012

Yes fire the housing head and why when they had a chance to put stipulations on the bailout money didn't they force the banks to put a moratorium on foreclosures.

9:10AM PDT on Mar 30, 2012

The petition is here:

http://www.thepetitionsite.com/436/209/342/save-struggling-homeowners-tell-obama-to-fire-edward-demarco/#next_action

7:39AM PDT on Mar 30, 2012

I signed a petition somewhere to fire him. Obama needs to get all Republican appointees out of his administration. They are there to carry out Republican objectives.

5:50AM PDT on Mar 30, 2012

Okay so where's the petition for this one? This obstructionist pig needs to go!

And yes... Laura's spampost was flagged.

4:11AM PDT on Mar 30, 2012

He needs to GO.
And Laura M, your SPAM is reported.

11:09PM PDT on Mar 29, 2012

Homeowners who are underwater in their mortgages may be able to refinance at today's low interest rates without having to appraise out thanks to new rules see your refinance rate at 123 Refinance

add your comment



Disclaimer: The views expressed above are solely those of the author and may not reflect those of
Care2, Inc., its employees or advertisers.

Care2 - Be Extraordinary - Start a Care2 Petition
ads keep care2 free
CONTACT THE EDITORS

Recent Comments from Causes

The problem with that is that no one can tell the difference and many continue to argue that allowing…

Hope he/she/they are caught very SOON and prosecuted to the fullest extent of the law.

ads keep care2 free



Select names from your address book   |   Help
   

We hate spam. We do not sell or share the email addresses you provide.

site feedback

ONSITE FEEDBACK FORM

Problem on this page? Briefly let us know what isn't working for you and we'll try to make it right!