Congressional Progressive Caucus (CPC) Co-Chairs Reps. Raúl M. Grijalva and Keith Ellison today renewed their calls for Edward DeMarco, the Acting Director of the Federal Housing Finance Agency (FHFA), which oversees Fannie Mae and Freddie Mac,to write down mortgage principal amounts for homeowners. In a speech before the Brookings Institution yesterday, DeMarco indicated that the agency is considering mortgage write-downs for certain underwater homeowners, which would forgive some mortgage debt for homeowners who owe more than their houses are worth. Nearly 28 percent of mortgage holders are currently underwater, according to the analytics firm CoreLogic.
“After months of delay, we are encouraged that Mr. DeMarco is finally hearing the calls of the American people to write down mortgages for millions of homeowners. Now it is time follow words with action. Decreasing the amount owed allows struggling families to stay in their homes and will begin to stabilize the overall housing market. Earlier this year we joined hard-working families and a strong group of CPC Members on the steps of the U.S. Capitol to call on Mr. DeMarco to reduce foreclosures, protect investors and communities and permit mortgages to be written down.
“Underwater homeowners need relief. Too many of them were victims of predatory loans or fraudulent practices that did not fully disclose the cost of their mortgage. Write-downs will help many of the 3.3 million mortgage holders whose loans are guaranteed by Fannie Mae and Freddie Mac and are currently underwater to preserve their homes. Simple, straightforward principal reductions are a good way to prevent the foreclosure crisis from dragging down the U.S. recovery. The CPC will be holding a hearing to examine this issue further.”