Help Struggling Americans Hold Onto Their Homes: Appoint New Federal Home Financial Agency Director

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Target: President Obama

Goal: Replace acting Federal Home Financial Agency director Edward DeMarco with someone who has the American people’s best interests in mind

Economists across the political spectrum agree that targeted debt relief — i.e. reducing the principal (the initial amount borrowed, and therefore owed) on mortgages of American homeowners facing foreclosure ­— would help many Americans keep their homes. This is especially relevant for the 11 million borrowers who owe more on their mortgage than their house is worth. Nonetheless, current Federal Home Financial Agency (FHFA) director Edward DeMarco refuses to implement this policy citing “moral hazard” — or rather, that principal reduction would somehow encourage some borrowers to strategically stop paying their mortgage — as his excuse. Most economists and legal scholars reject the notion that a significant number of American borrowers would stop paying their mortgages as a result of a targeted debt relief policy. What’s more, the institution headed by DeMarco, the FHFA, itself estimates that principal reduction could provide up to $500 million worth of relief to taxpayers. The Treasury department estimate is even higher, at $1 billion.

DeMarco has stated outright that his interests do not lie in providing relief for struggling American homeowners but in “preserving the assets” of Fannie Mae and Freddie Mac, the two government-owned mortgage-holding banks consolidated under the FHFA. In this sense he is clearly unfit for his position and many (including the Obama administration) have sought to have him removed from his position. However, Senate Republicans have blocked President Obama from appointing someone else to his position.

The President can get rid of Edward DeMarco. Like he did with the appointment of Consumer Financial Protection Bureau director Richard Cordray, the President can use a Senate recess to appoint a new director to the FHFA (DeMarco is the acting director). As long as DeMarco opposes policies that would provide needed relief for homeowners facing foreclosure, he demonstrates his ineptitude as the FHFA acting director. Americans struggling with foreclosure deserve someone who will speak for their interests. Demand that President Obama take action to remove Edward DeMarco.

PETITION LETTER:

Dear President Obama,

American homeowners are in trouble. Foreclosures, both legal and illegal, are going on across the country and Americans are struggling to keep their homes. Economists and policy makers — including those in your own administration — agree that principal reduction is the right action to take in the wake of America’s foreclosure crisis. But the acting Federal Home Financial Agency director, Edward DeMarco, continues to oppose this policy on abstract moral grounds that have nothing to do with the problem at hand — helping struggling Americans hang on to their homes.

I understand the Senate has blocked your attempt to dismiss DeMarco. This isn’t your only course of action though. Like you did with the appointment of Consumer Financial Protection Bureau director Richard Cordray, you can use a recess appointment to appoint a new head for the FHFA.

Mr. President, you can use your power to appoint someone who speaks for the interests of Americans struggling with foreclosure. Please replace Edward DeMarco with someone who cares about struggling homeowners.

Sincerely,

[Your Name Here]

Photo Credit: ProPublica; Chip Somodevilla/Getty Images

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One Comment

  1. Absurd that so many citizens are forced to leave their homes and big banks continue to gain in prosperity.

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