Rep. Lofgren and 115 Reps. Call for Fannie Mae and Freddie Mac to Help Underwater Homeowners Via Principal Reductions

Rep. Lofgren and 115 Reps. Call for Fannie Mae and Freddie Mac to Help Underwater Homeowners

Washington, DC – Today Rep. Zoe Lofgren, chair of the California Democratic Congressional Delegation, released a letter signed by 116 Members of Congress to Ed DeMarco, Acting Director of the Federal Housing Finance Agency (FHFA), calling for mortgage principal write-down relief for underwater homeowners. With support for swift action building, the Members of Congress told DeMarco, “Your unilateral decision to block all forms of principal write-down has prevented the housing market from recovering more quickly.”

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. On January 6th William Dudley, President of the Federal Reserve Bank of New York, called on Fannie Mae and Freddie Mac to implement several different types of principal reductions. Mark Zandi, Chief Economist at Moody’s Analytics, said at a February 9th Senate Banking Committee hearing that encouraging more principal reductions offers “the best odds of ending the housing crash more quickly and definitively.” Many other leading authorities have made similar statements, including Ben Bernanke, Chairman of the Board of Governors of the Federal Reserve; Martin Feldstein, Chairman of the Council of Economic Advisers under President Reagan; and Alan Blinder, former Vice Chairman of the Federal Reserve.

However, FHFA Acting Director DeMarco has refused to allow 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. The Government-Sponsored Enterprises (GSEs) under his conservatorship own or guarantee approximately sixty percent of the outstanding residential mortgages in the United States, including nearly three million underwater loans.

In the letter, the 116 Representatives urged FHFA Acting Director DeMarco to act: “Our country faces a national foreclosure crisis. The American people expect government officials, whether elected or part of the civil service, to solve the complex problems that our nation confronts. We therefore urge you to harness your agency’s powers, resources, and financial expertise to prevent more foreclosures and reduce negative equity.”


Copy of letter below…



Letter to Acting Director Demarco

6 Responses to “Rep. Lofgren and 115 Reps. Call for Fannie Mae and Freddie Mac to Help Underwater Homeowners Via Principal Reductions”
  1. lvent says:

    DeMarco is a ruse, just like all of the other little bitches who are blocking criminal prosecutions of all of these crooks……remove them and the hidden evil will likely be revealed..and I have a feeling that it might not be who any of us thought..!

  2. lvent says:

    Charles Fetters, isnt that the burning question that everyone would like to know right now…? Where were these Politicians…? Hmmmmm…the truth will be revealed why there has not been any criminal prosecutions of any of these scunmbag Banksters or Wall Street criminals……but all I can say is these banksters must have some really filthy, dirty secrets on these politicians and I cant wait until the truth is revealed to all…then the true criminals will be revealed and I think it could very well be…THE TRAITOR POLITICIANS….who have a lot of dirty, filthy secrets and are all shitting in their pants right now that the evil truth will soon be revealed.. …and these banksters have all of the dirt on them……Maybe thats why Obama hasnt shut down Gitmo yet…that is where the Politicians will all heading…soon to be waterboarded by all of us..!!

  3. Charles Fetters says:

    Where were all these Senators and Congress members three or four years ago?
    They just as much of the problem as the banks, because they got lobby contributions from all the banks.
    We don’t need modifications or principal reductions. We need to them to fess up and quit the big lies.
    After you steal homes and then turn around and tell the homeowner here’s $1500 to $2000 and forget we destroyed your lives.
    Yet the AO’s expect us to buy this line of crap.

  4. readdocs says:

    Still skirting the fact that these entities cannot modify loans they do not own.

  5. Steve Stanley says:

    Remove DeMarco. Kudos to these reps, who actually see the level of terror the banksters are committing.

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