This guy, Edward DeMarco, is deliberately damaging America -- promoting foreclosures, high unemployment and excessive taxes.
This guy, the acting head of the Federal Housing Finance Agency (FHFA), has aggressively denied help to eviction-imperiled homeowners.
And now he's threatening to prevent towns from implementing their own plans to rescue underwater homeowners -- those with mortgages exceeding their home values.
This guy, Edward DeMarco, has got to go. He's a George W. Bush administration holdover and is only by default running the agency that regulates Fannie Mae and Freddie Mac, the nation's mortgage financing giants. Handed the chance to help homeowners, as well as taxpayers, the economy and Fannie and Freddie, urged by President Obama and Treasury Secretary Timothy Geithner to seize that opportunity, DeMarco yelled, "NO, NO, NO, NO." So he's just gotta go.
There's some technical glitch with outright firing this bureaucrat even though he is defying the President of the United States. Fine. Demote him. Install him in a sub-basement office somewhere. And disarm him; defang him; disqualify him from wielding power to hurt America.
Here's what DeMarco refuses to do: He won't allow Fannie and Freddie to reduce the principal owed by underwater, foreclosure-threatened mortgage holders. He is denying them the help, even though a study by his own agency says this:
- It would cost Fannie and Freddie $3.6 billion less than its current efforts to help homeowners.
- It would save taxpayers $1 billion.
- It could help as many as 500,000 homeowners.
It would act as a stimulus to the economy -- one that would cost taxpayers nothing. They have everything to gain, and bankers and Fannie and Freddie have nothing to lose.
In fact, banks are doing it. Principal reduction now accounts for nearly 40 percent of all bank mortgage modifications. Banks are reducing principal because it can be cheaper than foreclosure. And the rate of re-default is lower than it is for other kinds of mortgage modification.
The FHFA study found that even if the Treasury Department gave money to Fannie and Freddie to help with principal reduction, taxpayers would ultimately save $1 billion.
The Treasury money would come from the Troubled Asset Relief Program (TARP) =- the one Bush created to bail out the banks. There could be no more appropriate use of that money than aiding homeowners who are unemployed, underwater and threatened with foreclosure because reckless banksters gambled with the economy and lost.
But one bureaucrat, one loyal Republican who doesn't want an improving economy to threaten Mitt Romney's election, one obstructionist callous to suffering Americans is forbidding Fannie and Freddie from establishing principal reduction programs.
DeMarco doesn't believe his own agency's study. He claims less than $1 billion will be saved. Not enough for him. He'd rather not do it if it saves taxpayers only $500 million.
Also, DeMarco contends he is very worried about moral hazard -- about rewarding people who might manipulate the system to get a principal reduction. DeMarco would rather squelch the program for everyone than countenance cheating by one homeowner.
The program is intended to help only underwater homeowners who already are behind on mortgage payments. It's possible that some people whose mortgages are underwater but who have incomes sufficient to make the payments would deliberately fall behind in an attempt to qualify.
They'd be placing themselves in significant jeopardy if they did. That's because an investigator may deny their application for principal reduction after determining that their income remains sufficient to cover mortgage payments. And at that point, they'd have damaged their credit rating by deliberately defaulting on their loan.
It's worth risking some small amount of cheating for $1 billion in savings to taxpayers and a massive free stimulus to the economy. It's worth it to rescue hundreds of thousands of struggling homeowners threatened with foreclosure. It's worth it to salvage communities spiraling down because of neighborhoods deteriorating from a multitude of vacant foreclosed houses and homes posted with eviction notices.
Just this week, DeMarco attempted to unilaterally expand his power and authority by threatening to take action against communities that are considering using eminent domain to seize underwater mortgages and reduce the principal owed. In these places, like San Bernardino County, Calif., as many as half of mortgage holders are underwater. DeMarco said no. No help for besieged towns. No help for besieged homeowners who, through no fault of their own, lost home value and jobs. DeMarco rules.
Earlier in his reign, DeMarco blocked homeowners and communities from using a federal program called PACE established by Congress to ease the purchase of energy-saving household projects such as rooftop solar panels.
Like the principal reduction program, PACE would have put money in homeowners' pockets and created jobs. The money would come from lowered energy bills and the jobs from additional orders at manufacturers of energy-saving devices.
But Emperor DeMarco said no. This guy has got to go. Senate Republicans blocked President Obama's choice to replace DeMarco. So it's time for the President to make a recess appointment to head FHFA and demote this guy DeMarco who is poisoning the economy and underwater homeowners.
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On August 25, 2009, President Obama Appointed him,. Previously Mr. DeMarco served as FHFA’s Chief Operating Officer and Senior Deputy Directorsince FHFA’s inception in 2008. A career civil servant, He joined the Office of Federal Housing Enterprise Oversight a predecessor to FHFA, in October 2006 as its Deputy Director. He came to OFHEO from the Social Security Administration where he served 7 years, prior to this he was 10 years at Treasury. Here is his history;
http://www.robertstoweengland.com/index.php/writer/382-qaa-with-ed-demarco.html
This is the problem with all politicians today, none will look honestly at what happened, who caused it, face up to mistakes that were there own and just FIX IT! But no.. STOP YOUR PARTISAN B.S.! Pull up your big boy and girl britches and do your homework. Stop listening to the likes of Krugman who’s entire economics are skewed by party politicks and look for the facts yourself. Those who can, do! Those who can’t teach, and criticize those who can!
So, the way to end partisanship in your world is for everyone to just give up and agree with you.
Next, having once been awarded a Noble prize does not bestow any superior ability to be right, It simply means you had something new, unique and yes, intelligent, to say on that one day! However, attempting to find a solution to any problem stating from any extreme perspective rarely gets to a correct answer. Partisan views are be nature extreme left or right. I don’t care what might be on your mantle or your office wall! So wrong again.
Finally, I don’t expect anyone to agree with me, I expect people to use their intelligence to do some real fact checking for themselves and make an informed intelligent decision. Spewing the party line and regurgitating either of their talking points demonstrates an inability to make an intelligent informed decision due to laziness or ignorance on how to research the truth in any subject. I expect you to act like an adult and look for your own truth. So I am sad to say you are wrong again. I was not a big Regan fan, but he did say one thing that works for all Americans. ‘TRUST BUT VERIFY!’ Operative word ‘VERIFY!’
Frankly, I've got a lot more respect for the Nobel Prize guy who, BTW, knows how to spell Reagan, even if he doesn't agree with him.
But the problem is, they don't have it! At least according to all the reports, so there will be a cost to the taxpayer and certainly 'no stimulus' unless someone is trying to pull off a fraud on us in the first place. Choose your truth! They have it and therefore can afford to pay their debts which in itself would act like a stimulus, (imagine the effect of people paying their just debts and returning the economy to the right track,) or they don’t and need help, therefore no stimulus to be had.
To blindly follow what Obama wants, for political gain, would be a serious mistake.
We are all still suffering from the financial fallout caused primarily by the actions of Fannie Mae and Freddie Mac.
http://www.nytimes.com/2012/08/13/opinion/the-one-housing-solution-left-mass-mortgage-refinancing.html?_r=2
He's already gone Leo. Just another tinkle-downer all over those who need his help the most.
Homes with loans that have been secularized and the banks are trying to foreclose; this needs to stop immediately. These loans are filled with fraud, the banks are trying to cover up the fraud by adding more fraud; jail time for the attorneys who support this fraud and the banks who are behind this massive cover up. DeMarco represents one part of the housing crisis, maybe he is the ethical one, the rest are trying to clean up this huge mess with one band aid fix after another; but they never go after the big guns who caused it. They just want it to go away and they don't care how it's get done as long as no one goes to jail.
Then there is a group of homeowners who bought homes with teaser rates that went up and up while the ecomony went down and fizzled. That group, put a fixed rate on their mortgage(today's rate), , if they can pay it, perfect, if not, no one is quaranteed to own a home in the US.
Then there is the group who had their loans sold and secularized. The banks will not give loan modifications due to investor guidelines. Here is Tom, he put down $500,000, his home is not underwater, but he cannot refinance, he has lost his job but found another, but he is not making the same amount of money, he is paying a high interest rate which the bank will not change, under your system he qualifies for nothing and he loses his house but Susie saves hers. Don 't you think before we start passing out millions of dollars we should more research?
We now know most of the fraud that went on, it affected interest rates, it caused the housing crisis, it made a muck of things. We do need to stop the bleeding and get beyond this crisis but we cannot do it in a helter skelter way where some people get relief but others who really need it and deserve it, get nothing.
If he did what the left ask, it would mean that companies like AIG would need another massive ballout as he would have reduce the loan for millions of people that are paying them.
When you have economic issue like this, you have no good solution, the sad part is we bailed out the wealthy in the beginning and now everybody wants a bailout.
Guess what friends, the government takes care of people with high paid lobbyist, you want a bailout, you need a lobbyist.
Look what the democrats were willing to do to the auto companies, when they refused Mr Bush request to allow him to give auto some TARP money, they said, no way, not doing it, nobody paid fo it let.
Mr Bush was forced to give auto money illegally from TARP to save them, it was something that nobody talkes about, Mr Bush saved auto from the Democrats.
http://www.bloomberg.com/news/2011-11-28/secret-fed-loans-undisclosed-to-congress-gave-banks-13-billion-in-income.html
Giving a bank a loan then borrowing back the same money at a higher rate is a give out, and buying assets that the Treasury did is wrong.
We should have required them to file chapter 11, then bailed them out, so we could have gotten rid of the bonus contracts in place.
It's buying TIME.
Go to a bank. Ask for money, RIGHT NOW, for a home. They set terms and you agree ... or not. If you agree and sign the contract, you GET THE MONEY Right now. All if it. Then you pay it back. There's no money made if you simply pay back the face value of the loan. That would be like lending a friend a fiver and the next day, they give it back. Banks make money by selling time. Sometimes, it's 30 years. You know EXACTLY what that 30 years costs. Sometimes it's 3 years. And the terms can change. You "purchase" the time YOU want.
Now, if they start to reduce the principal (the money they gave you RIGHT NOW) you'd be paying them back at LESS than the agreed amount. So, your friend gives you $4,50. And that's that. Let me guess. You won't be lending your friend money anytime soon! And that's what's happening with banks right now. If there's a whiff of not paying the money back ... they don't lend. And if they don't lend, you will be buying that time yourself. You can get a home when you have the FULL AMOUNT. CASH. On your own. Is that what we REALLY want? Keep talking about forgiving that principal and that's what you'll get. A country that sells TIME to those that don't need it.
She's bought IT.
Only problem is her understanding of complexity is to sort it, snort it, and sift it down to the lowest common denominator she can hope to comprehend, which she has just condescendingly regurgitated as a mess on your carpet.
But incorrect.
Mortgages are loans. Loans have terms. That's how money is made. You may not like that, but it is so. So, we man up and pay our debt or we all pay cash. Your choice.
And so much smarter than the banks that are providing principal reduction in 40 percent of cases where mortgage holders seek relief. Stupid bankers!
If you understood the contract, you'd be figuring it out for yourself. You may have even PLANNED that in advance!
Or, you had no idea what you were doing.
My house is much less expensive than I could afford now, or when I purchased it.
If irresponsible homeowners get some free money from the government, then why should not I get some free money also?
People should be responsible for their own actions.
Sometimes it is better not to listen to or believe salesmen selling houses, new cars, timeshares, vacations, furniture, insurance, investments, etc.
I couldn't agree more.
There are many who chose not to enter the home buying frenzy. There are those who purchased what they could afford. There are those who took 30 year, fixed mortgages with no exotic or sub-prime surprise at the end of it. And those people should be rewarded for their GOOD behavior. Not the other way around.
Buying a home is an investment. And like any other investment (stocks, bonds, business) there is risk. Each time a business closes or the Market tanks, no one gets money back. And that's what forgiving principal is. It's forgiving money already borrowed. Just because the housing market changed. If you need to remortgage (my neighbor just did) then go to a bank. If you don't qualify, you might ask yourself why. The days of free lending and free spending are over. And they should be. They never should have been allowed in the first place, but that's another argument that covers decades.
This was a classic case of stopping the free market. The bailouts were a bad idea. Using the money made from them (Yes, the banks paid back WITH interest and it was a money maker.) the government gave it to another bailout. Commonly called TARP ll. That was the auto bailout and they did NOT (and have not) paid it back.
So, the answer is, you pay back your loans WITH THE SAID INTEREST, like the banks did, or you get nothing.
No one except AIG and the banks, huh?
The idea that you should have interest applied to your principal is just, well, I don't know WHAT it is! You signed a contract. It's that simple. Now, if you want to pay on the BACK end of your mortgage, you can do that. As long as you have no penalty to do so. (That's in your contract, too.)
You seem like someone who doesn't understand the loan process. Believe me. MANY do. And they are not asking for money back (which is what that interest or a principal reduction is.) You CAN"T just reduce some mortgages, forgive them or be fancy with the contract. What do you say to all those that did it the RIGHT way?????
And that may be why no one is touching this. Punishing those that have done things correctly tends to create an atmosphere of ... irritation.
I'm sorry but if we go with the mentality that a contract isn't a contract, then we have lost everything. No one will trust anyone else. There won't be loans except for those with large down payments and excellent credit records and jobs. What you are suggesting may seem like a great short term fix but it will, with little exception, be the end of home ownership in the future.
Google it, many executives were aware of the practice. If the CEO is so important, as evidenced by the GOP saying they "earn every dime" of their millions of salaries, then they ultimately have more accountability than Joe Six Pack who is being told by his loan officer to take a liar loan because it's all good and houses will go up forever.
But if it's a bank, no, they don't have to fulfill contracts. They don't have to suffer the consequences of bad decisions. They get a bail out. But not homeowners.