Washington, DC – The Co-Chairs of the Congressional Progressive Caucus (CPC), Reps. Raúl M. Grijalva (D-AZ) and Keith Ellison (D-MN), released the following statement commending the Federal Housing Finance Agency (FHFA) for offering principal reduction for some homeowners who are underwater on their mortgages:
“I’m glad to see FHFA taking this needed action to help Americans who are still suffering in the wake of the housing crisis,” Rep. Grijalva said. “The Principal Reduction Modification program announced today will ease the burden of runaway debt for some 33,000 Americans and bring long overdue relief to their families. While I thank Director Watt and this administration for acting on this important issue, there are still families in every state who are desperate for help but are not eligible for this program. Our work is not done, and the Great Recession is not truly behind us, until we ensure fair outcomes for each and every one of them.”
“I’m pleased that the Federal Housing Finance Agency (FHFA) announced that some homeowners who owe more to Fannie Mae or Freddie Mac than their home is worth will be able to have their outstanding balance reduced.” Rep. Ellison said. “Allowing homeowners to reduce the amount they owe on their mortgage is a way to keep these families in their homes. While the number of families eligible for help is small – about 33,000 – this is an important first step that we hope the FHFA expands in the future.”
The Congressional Progressive Caucus has repeatedly called for debt relief for homeowners who are underwater, and has sent letters to federal agencies to that effect. In February, 2012, the CPC called on former FHFA Cheif Ed DeMarco to write down the principal on underwater mortgages or leave his job. They renewed the call for principal write-downs in April of that year. The CPC held a hearing on the mortagae crisis and called for principle reduction later that month, and met with FHFA Director Watt shortly after he was confirmed to urge action on this matter.