New York Attorney General Eric Schneiderman and Massachusetts Attorney General Martha Coakley have called for Federal Housing Finance Agency head and notorious Wall Street puppet Edward DeMarco to be removed from office.
In an op-ed in Politico, Schneiderman and Coakley join a long line of critics noting DeMarco’s commitment to screwing homeowners.
Last week, we joined seven other state attorneys generals in calling on President Barack Obama to replace Edward DeMarco, the acting director of the Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac. We don’t have anything against DeMarco personally, but we believe that he is standing in the way of progress toward a full economic recovery and hurting families across the country. It is time for new leadership and a new direction at Fannie and Freddie.
DeMarco has been called a “One Man Roadblock” to helping homeowners, openly refusing to help homeowners in trouble. Schneiderman and Coakley continue.
Under DeMarco’s leadership, Fannie Mae and Freddie Mac have refused to allow principal write-downs for underwater mortgages. At a House Financial Services Committee hearing last week, DeMarco was questioned by Congress and confronted by protesters calling for mortgage principal reduction, but he again refused to change his position.
This failed policy is a direct impediment to our economic recovery and stands in the way of our efforts to provide much-needed assistance to homeowners across the country. While we have seen some encouraging economic indicators lately, it is clear that our economy is still struggling to rebound and the lingering housing crisis is a major reason.
By refusing to allow write-downs DeMarco has caused incredible amounts of pain and suffering to homeowners, many of whom have needlessly faced foreclosure. The hardline stance, while applauded on bailed out Wall Street, has met without almost universal disdain elsewhere. In December the Obama Administration hinted at finding a replacement for DeMarco. Nothing has come of it as of now.
Besides the inaction of his office, housing activists have been especially infuriated by DeMarco’s justification for not allowing the write-downs. DeMarco has claimed it would be “moral hazard” to allow the write-downs and that other homeowners would be motivated to go into debt and endanger themselves in order to benefit from a write-down program. Seriously. And of course this is downright hilarious when you consider no such argument prevented TARP.