A.G. Schneiderman Op-Ed: President Should Replace FHFA Acting Director Today To Further The Housing Recovery

Schneiderman: President Can Deliver Foreclosure Relief To Thousands Of Families By Appointing A New FHFA Acting Director Today

NEW YORK –Attorney General Eric T. Schneiderman today published anop-ed in the New York Daily Newsurging President Obama to appoint a new acting director of the Federal Housing Finance Agency to replace current Acting Director Edward DeMarco, whose policies have stifled the delivery of relief to thousands of Americans facing foreclosure. The op-ed notes that, while the President awaits the confirmation hearings of his nominee for FHFA Director, he can replace Acting Director DeMarco with a deputy director. The following are excerpts of the article:

  • ON DEMARCO’S LEGACY: Since 2009, Edward DeMarco has served as acting director of the Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac. He should have been a critical figure in setting policy to get us out of the foreclosure crisis. Instead, DeMarco’s most notable achievement has been blocking programs to help struggling homeowners.
  • ON THE PROMLEM OF NEGATIVE EQUITY: In the fourth quarter of 2012, 10.4 million properties — 21.5% of all homes with mortgages — had “negative equity,” owing more on their mortgages than their properties were worth…. In many cases… foreclosures can be avoided by simply reducing the amount that homeowners owe. Very modest reductions can often enable families to keep their homes and continue to pay off their loans.
  • ON THE COST OF FAILING TO REDUCE MORTGAGE PRINCIPLE: The Congressional Budget Office estimates that without a policy change to provide principal reduction for Fannie and Freddie mortgages, an additional 600,000 homeowners will go into default over the next two years.
  • ON THE NOMINATION OF MEL WATT: President Obama’s nomination last week of Rep. Mel Watt as permanent director signals that he’s ready for a confirmation fight that should result in better housing policy. But the outcome of that fight is far from certain. And even if the President succeeds, how long will it take, and how many more homeowners will lose their homes, before Watt takes office?
  • ON THE ABILITY TO REPLACE DEMARCO IMMEDIATELY: There is a quicker way to get rid of DeMarco now, and pave the way for a new policy direction for the Federal Housing Finance Agency. He can be replaced as acting director by one of the agency’s three deputy directors — today.
  • ON THE NEED FOR A NEW ACTING DIRECTOR: With a new acting director, the agency can quickly move to stanch the bleeding and bring relief to struggling homeowners. Meanwhile, Senate Republicans would no longer have reason to hold up Watt’s nomination. The President will have taken their leverage away and ensured responsible leadership for the agency.

The full op-ed by Attorney General Schneiderman can be read here: ag.ny.gov/press-release/op-ed-obamas-underwater-rescue.