WASHINGTON In an unusual ouster bid, attorneys general in nine states called on President Obama and Senate leaders today to fire Ed DeMarco, the director of the Federal Housing and Finance Agency, which oversees Fannie Mae and Freddie Mac, charging the Bush-appointee with being a major impediment to resolving the ongoing foreclosure crisis.
The state officials, which have been negotiating the past two years with Fannie and Freddie for homeowner relieve, said in a letter to the President and Senate leaders that DeMarco has been a “direct impediment to our economic recovery” by his continued refusal to give principal relief for struggling homeowners for Fannie- and Freddie-owned mortgages.
“The FHFA’s refusal to allow for principal write-downs that would result in more loan modifications is a direct impediment to our economic recovery and stands in way of our efforts to provide much needed assistance to homeowners in New York and across the country,” said Eric Schneiderman, attorney general for New York. “Under the leadership of Acting FHFA Director Edward DeMarco, Fannie Mae and Freddie Mac remain an obstacle to progress by refusing to adopt policies that will help maximize relief for struggling homeowners. The time has come for the President and Congress to work together to install a new, permanent leader at FHFA that will be a partner, not an impediment, in the national effort to comprehensively address the foreclosure crisis.”
“Fannie Mae and Freddie Mac should be among our partners in this effort, and leaders in the arena of loan modification best practices,” said the AGs’ letter. “Instead, they have been an obstruction.”
The attorneys general argue that principal write-downs are a central component of the national settlement, and continue to bring meaningful relief to distressed borrowers, spurring our nation’s economic recovery. Principal reduction is a form of loan forgiveness that would help “underwater” borrowers whose mortgages are worth more than their homes.
The group said the impact of mortgage modifications which often include principal write-downs, continues to be felt on the housing market, economy, and our local communities.
