Calls for Federal Housing Director’s Termination Get Louder
Standing in front of a foreclosed home from which a woman was being evicted, Rep. Keith Ellison (D-MN) joined the growing chorus of voices demanding the ouster of Federal Housing Finance Agency Director Ed DeMarco.
Our Miami foreclosure lawyers know the demand comes less than a month after a number of state attorneys general called on the President to fire DeMarco, who is serving as the acting director, saying that his policies are serving only to impede economic progress.
Among the top complaints: He is doing little to keep people in their homes. While his agency oversees the taxpayer-funded mortgage backers Freddie Mac and Fannie Mae, he has refused to implement President Obama’s proposal to slash principal payments on underwater mortgages. In these cases, where the amount owed on the mortgages is higher than the current value of the home, reducing the principal would go a long way toward helping people stay in their houses.
Not only that, this element was part of the multibillion-dollar mortgage settlement reached last year between five major banks and 49 state attorneys general. Whoever is named to the post should be willing to move forward on this element, the attorneys general say.
DeMarco, who has held the post as the top FHFA official for the past three years, has refused on the grounds that to do so would expose taxpayers to a potentially high risk for losses.
Although the Obama administration has been sharply critical, it has done little to remove DeMarco from his post. Some have speculated that keeping DeMarco on allows the White House to maintain an easy scapegoat for housing policies and settlements that aren’t working anyway.
The administration did attempt to nominate another person back in 2010, but that nomination was shot down by Congress.
There are some rumblings that the president may be close to naming another successor, but many are saying it can’t happen soon enough and, indeed, should have happened long ago.
The split has primarily been along partisan lines, with Republicans arguing against principal reductions and Democrats arguing staunchly for it.
A study released last year by the Treasury Department was clear in its indication that a carefully-directed principal write-down program could help to actually save Fannie and Freddie money – not squander it.
Among the attorneys general who have signed a letter requesting a new director to the program are those hailing from California, Maryland, Washington, Nevada, Illinois and Delaware.
Additionally, nearly 50 members of the House of Representatives signed a letter to the president in February, urging an FHFA leader who would implement the directives of Congress in a way that is efficient and that will promote the recovery of the country’s housing finance markets.
Rep. Ellison was among those on board. He called the demand for DeMarco’s ouster extreme, but reasonable, adding that big banks must change the way they are conducting business.
“Enough is enough,” he said.
The woman whose home was being lost has been a victim of a practice referred to as “dual tracking,” which is when a bank works to evict a person while at least on paper working out a loan modification agreement.
If you’re battling foreclosure in Miami or the surrounding areas contact Jacobs Legal for a confidential appointment to discuss your rights. Call (305) 358-7991. Also, don’t miss Miami Foreclosure Attorney Bruce Jacobs on 880AM/the Biz, every Wednesday from 5 p.m. to 6 p.m. on “Mortgage Wars,” discussing foreclosure topics that matter to YOU.