Elijah Cummings gets help in Edward DeMarco fight
Rep. Elijah Cummings’s fight to help struggling homeowners has new allies: officials from across the country and within President Barack Obama’s own Cabinet, helping him turn up the pressure on Edward DeMarco, the overseer of government-backed mortgage giants Fannie Mae and Freddie Mac.
And the outcome could significantly shape up the White House’s admittedly spotty record on the housing crisis. The stakes are high: As the housing market goes, so goes the economy, and the 2012 presidential election expected to turn largely on whether voters believe Obama has turned things around.
Continue ReadingFor months, Cummings has been demanding DeMarco offer debt reduction for homeowners struggling to pay their mortgages, only to be rebuffed by the argument from the Federal Housing Finance Agency conservator that this could endanger the ability of Fannie and Freddie to stay solvent and avoid another $130 billion government bailout.
But now, with a range of supporters that includes California Attorney General Kamala Harris and Housing Secretary Shaun Donovan, the Baltimore Democrat is aiming to beat DeMarco’s resistance to principal reduction — a refinancing strategy that involves Fannie and Freddie forgiving part of a homeowner’s debt.
“He and he alone stands in the way of hundreds of thousands of people, if not millions, being able to [literally] get a new lease on life,” Cummings told POLITICO in a recent interview.
After three years of inconsistent success and revamped, high-profile programs, the president himself has admitted he’s fallen short of his 2009 goal of helping 7 million struggling or underwater homeowners — administration officials publicly acknowledge they’ve gotten only halfway there.
The lack of progress on housing remains a major threat to the economy, despite the upswing of other economic indicators. Even as national unemployment declined last month, joblessness among home construction workers edged toward 18 percent, twice the national average. At the same time, market analyst RealtyTrac predicts home foreclosures will accelerate through summer, and the Case-Shiller economic survey showed home prices in the nation’s biggest markets fell for a third consecutive month.
Meanwhile, Cummings, a former defense lawyer who nearly lost his own home to foreclosure years ago, has fought against the wave of foreclosures and used his power as ranking member on the Committee on Oversight and Government Reform to investigate irregularities like risky high-interest loans in the industry.
Cummings has kept DeMarco in his sights throughout. In hearing after hearing, Cummings has challenged DeMarco to come clean about his opposition to the principal reduction strategy, and last month asked him to explain why the FHFA in early 2010 teamed with a mortgage bank to quietly start a pilot project on principal reduction — then killed it just weeks before the midterm elections when House Republicans swept to power.
In a stinging letter co-signed by Rep. John Tierney (D-Mass.) in February, Cummings took DeMarco to task for “troubling reports” that FHFA is continuing to block Fannie Mae and Freddie Mac from joining principal reduction programs implemented as part of the multistate, $27 billion “robo-signing” settlement the White House announced last month. He also demanded DeMarco bring him any and all email, documents and research FHFA has on principal reduction and the pilot program.
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Joseph Williams
Readers' Comments (8)
The so-called "Homeowners will receive about 7% of the funds.
Where the rest is going...........Who knows.
Cummings seems to be taking up where Barney left off.
The Government needs to get OUT of NIJA loans.
They got us into this mess with Fannie/Freddie now oweing us $150 BILLION dollars.
"helping 7 million struggling or underwater homeowners"
You could GIVE a MILLION dollars to EACH homeowner and come out ahead of what Fannie/Freddie is DRAINING the taxpayers.
PLUS
We are PAYING past Fannie/Freddie LAW Bills for their ENRON accounting scandal.....OVER $50 million dollars and counting.
Ever hear the media bring that UP?
Should we BORROW more money from China to PAY Fannie/Freddie plus then PAY China INTEREST on that money?
We can't afford another Barney and we can't afford Cummings continuing Fannie/Freddie policy.
PERIOD
Kamala Harris should be ashamed for having granted to the big banks broad immunity on lawsuits about the mortgage-origination fraud (flood of fake-mortgages) in the National Mortgage Settlement, in exchange of cash to help balance the states' budget and a mortgage debt forgiveness plan in exchange of a bunch of votes before the elections.
FHFA's DeMarco is our hero!
The Government needs to get OUT of NIJA loans
it is Intresting to read your Artical thanks for sharing this informaitve Artical .i realy feel glad to b here
family succession planning
President Obama should just do a recess appointment and get rid of DeMarco. DeMarco is just there temporarily.
This is possible, is a viable option when markets fail adjustments to "Fair Market Value"
Face it USA Homeowners = Your House Was Built & Bought At An "Inflated Price"
Your 275k Home NEVER was worth 275k & YOU bought it anyway, OK we forgive most of you - BUT-
Now that we all know both Banks & the Real Estate Industry (en tot tot) "Made Money On Fraudulent Over-Pricing"
Reduce the Principal In Proportion To The Inflated Purchase Price. (The Fair Market Price itself was the Fraud)
Yes, Fannie/Freddie MUST offer debt reduction via Principal Reduction.
These articles lack meaningful analyis and data for people like me to form an informed opinion.
Things I know:
Part of what is holding the economy back is consumers' need to reduce their level of indebtedness.
The GSEs are still bleeding money on their 2005-2008 book, but 2009-present loans are performing better now that underwriting standards have improved.
In fact, I can tell you a lot about the GSE finances because they publish them. Where do I get a breakdown of the costs, benefits and risks along with the implementations proposals of debt forgiveness?
I am not saying it cannot be done in a way that would provide an actual benefit to the wider economy because I am sure it might be done in a way that is helpful, but I am suspicous of Congress because since the GSEs were placed into Conservatorship, they have been viewed by some as an additional source of funding (don't forget that while the GSEs have drawn 160+ bllion, they are paying 10% interest on what they have drawn and have paid more than 27 billion without reducing what they owe the Treasury).
So where does one go to get more info?
I don't approach these kind of things with ideological blinders on, and I am aware of the macro argument that reducing homeowner leverage is a needed structural adjustment, so where are the numbers, and what are the details of the argument for "debt forgiveness"?
The bleeding of the American Taxpayer continues:
Fannie Asks Gov't for Almost $4.6B After 4Q Loss
Pfft
http://www.fanniemae.com/re...
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