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Madigan joins calls to replace DeMarco at FHFA

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Days after Illinois Attorney General Lisa Madigan joined the growing chorus demanding the replacement of FHFA interim director Edward DeMarco, fifteen protestors interrupted DeMarco’s appearance Tuesday before the House Finance Committee.

Five were arrested, according to the New Bottom Line [2] Campaign.  (Video here [3].)

“DeMarco is kicking my family out of my home,” called out Ramon Suero, a homeowner facing foreclosure and one of the five arrested. “Dump DeMarco! Principal Reduction now!

“Ed DeMarco’s policies are putting my three kids, my wife, and me out on the street. If the president doesn’t get rid of him, he’s responsible for putting millions of Americans just like me on street as well.”

Housing advocates have been calling on President Obama to replace DeMarco, who has blocked principal reduction for underwater homeowners with mortgages held by Fannie Mae and Freddie Mac.  (See previous Newstips here [4].)

“DeMarco’s actions are driving millions of Americans into foreclosure and record debt,” said Tracy Van Slyke, executive director of the New Bottom Line.

“We are fed up, and it is time for President Obama to act on his promises to America’s middle class by dumping DeMarco and nominating a permanent director who will move principal reduction at Fannie Mae and Freddie Mac and stand with all homeowners and taxpayers.”

New Bottom Line is backed by Chicago-based National People’s Action [5].  Local groups including the Woodstock Institute [6] and IIRON [7] have also called for DeMarco’s firing.

With 25 percent of the nation’s homeowners owing more than their homes are worth — including a half-million homeowners in Illinois — systematic principal reduction would provide a major boost to the ailing economy and revive the housing market, New Bottom Line has argued [8].

On Sunday, the New York Times reported [9] that Madigan joined attorney generals from several states in calling on Obama to fire DeMarco.  The Bush administration holdover has ignored Treasury Department support for principal reduction, which was a major feature of the state AGs’ settlement with five big banks over the “robo-signing” foreclosure fraud scandal last year.

“Unfortunately, Fannie Mae and Freddie Mac remain an obstacle to progress by refusing to adopt policies that will maximize relief for homeowners,” Madigan said in a release [10]. “It is time for new leadership at the agency who will address the foreclosure crisis in a meaningful way to help bolster the nation’s economic recovery.”

The FHFA’s continued position that principal forgiveness conflicts with its goal of asset preservation is “not supported by reality,” the attorneys general assert in a letter to the president.

Last month, Representative Jan Schakowsky joined [11] 44 House members in a letter to Obama calling on him to replace DeMarco.

“It is time now for the president just to say: ‘Edward DeMarco, you are fired,’” Schakowsky said [12].

Under DeMarco, the FHFA has challenged Chicago’s vacant properties ordinance [13], arguing the agency cannot be legally required to maintain foreclosed properties it owns.