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Community groups cheer DeMarco replacement

Last week Chicagoans joined a national protest action at the home of Federal Housing Finance Agency director Edward DeMarco, demanding his resignation.

On Wednesday, President Obama responded to growing demands to replace DeMarco, naming U.S. Representative Mel Watt (D-NC) as his replacement.

“It’s long overdue,” commented Katie Buitrago of the Woodstock Institute.

“This is a good day for homeowners and families across the state of Illinois and a big step in the right direction for our economy,” said Rev. Marilyn Pagán-Banks of IIRON, a Chicago-area organizing network.

“We now encourage Congressman Watt to implement common-sense policies like principal reduction to bring relief to tens of millions of homeowners and to jumpstart the economic progress our country needs.”

Community groups and housing advocates have called for DeMarco’s replacement for over a year, faulting him for blocking principal reductions on mortgages owned or guaranteed by Fannie Mae and Freddie Mac, which the FHFA oversees.

They argue that reducing mortgage principal to reflect the fair market value of homes that since the housing crash are worth less than what homeowners owe would prevent foreclosures, stabilize the housing market, and boost the economy.

DeMarco has been “the biggest roadblock to our country’s economic recovery,” said Tracy Van Slyke of the New Bottom Line coalition, which has spearheaded a “Dump DeMarco” campaign.

At last week’s action, as 500 people from National Peoples Action gathered at DeMarco’s Washington D.C. home,  Reverend Cliff Parks of Illinois Peoples Action noted that Fannie and Freddie control over half the mortgages in the nation, including those of nearly 14 million  underwater homeowners.  (See video below.)

Elizabeth Scrafford, a DePaul student and leader with IIRON Student Network, read a resignation letter drafted for DeMarco, holding him responsible for 1,800 families facing unnecessary new foreclosures every day that he has delayed approval of principal reduction.

Watt is known as an early advocate for action against predatory lending, Buitrago said.

Noting that he faces an uphill battle to win confirmation from the Senate, Buitrago said Obama should consider installing Watt with a recess appointment.  The administration’s previous nominee for the post withdrew in 2011 after Senate Republicans refused to act on his nomination.

Republicans say they want a plan from the administration for eliminating Fannie and Freddie before they consider an FHFA appointment.  But IIRON and other groups are calling on Watt to “support the vital role [the agencies] play in ensuring housing opportunities.”

Check out “NPA knocks on Ed DeMarco’s door,” from April 22:

Madigan joins calls to replace DeMarco at FHFA

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 Campaign.  (Video here.)

“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.)

“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.”

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Second term: immigration, climate, foreclosures

Immigration reform, climate change, the foreclosure crisis: with some disappointment over limited progress on these issues over the past four years, local activists hope more will be done in President Obama’s second term.

While support for comprehensive immigration reform has broadened noticeably since the November election, immigrant rights groups are concerned over dramatically stepped-up deportations under Obama, which reached 409,000 last year.

They’ll march on Inauguration Day (Monday, January 21, starting at 11 a.m. at the Daley Plaza and rallying at 12 noon at the Federal Plaza) calling on Obama to declare a moratorium on deporations.

A moratorium would be a first step toward comprehensive reform, said Eric Rodriguez, executive director of the Latino Union of Chicago.

“We want the president to be on the right side of history,” he said.  “His second term will define his legacy.  Will he be the president who deported more people than any other in history, or the president responsible for championing inclusion and equality?”

Immigration raids are a constant threat in Chicago communities today, said Tania Unzueta of the Immigant Youth Justice League; just last week scores of local residents were picked up in raids on a factory and two gathering places for day laborers.  IYJL is working to support several families who have members in detention, she said.

“Obama says he wants to do the right thing and keep families together, but we aren’t seeing it in our communities,” she said.

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Two actions target Fannie Mae

Four years after Fannie Mae and Freddie Mac were put under federal conservatorship, actions tomorrow and next Monday are targeting the agencies for blocking principal reduction in mortgage refinances.

On Wednesday, September 5, Occupy Chicago will rally at 5 p.m. at Fannie Mae’s office at 1 S. Wacker, where families facing eviction will speak out, and then march to President Obama’s campaign headquarters, 130 E. Randolph, where protestors will be chained together with balls representing mortgage debt.

It’s part of three days of actions targeting “Obama’s failures as president” and “how both Obama and Romney fail to represent the interests of the 99 Percent,” according to a Facebook announcement.

On Monday, September 10, local community groups joined by Occupy Our Homes groups from Minneapolis and Detroit will march from Daley Plaza at noon and rally in front of Fannie Mae (1 S. Wacker) at 1 p.m. and Freddie Mac (333 W. Wacker) at 2.

That protest is part of a national day of action against Fannie and Freddie by community groups working to stop foreclosures in several cities, said Stuart Schussler of Centro Autonomo of Albany ParkChicago Anti-Eviction Campaign is also participating.

Centro Autonomo protests at bank branches to support families in foreclosure who are seeking loan modifications. Principal reduction is a vital component of affordable loan mods, Schussler said.

“Sometimes we get a favorable response from the bank” that’s servicing the mortgage, but but if Fannie or Freddie holds the morgage – as they do in a large proportion of cases – “they’ll say it’s out of our hands,” he said.

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AG Madigan to back ‘maximum’ homeowner relief

At a rally with community organizations on Sunday, Illinois Attorney General Lisa Madigan is expected to commit to pressing for “maximum” mortgage relief for underwater homeowners as part of the federal-state investigation into bank fraud.

She’ll appear with the regional organizing network IIRON on Sunday, June 10 at 3 p.m. at St. Mark’s United Methodist Church, 8441 S. St. Lawrence.  IIRON will also be unveiling a new Covenant for Economic Justice.

It’s a significant step for Madigan, who’s a member of an Obama administration task force investigating securitization fraud in the foreclosure crisis, organizers say.

Last year IIRON pressed Madigan to hold out for more money to help homeowners wrongfully foreclosed on in the robo-signing settlement by state attorney generals. Though the monetary settlement in that case was disappointing, grassroots pressure did result in limiting banks’ immunity from liability in the deal, said David Hatch of IIRON.

He said IIRON and groups including National People’s Action are calling for $350 billion worth of principal reduction for underwater homeowners.  An NPA report last year estimated underwater homeowners in the U.S. owe a total of $700 billion more than their homes are worth.

Stealth bailout

That’s a serious drag on the economy, these groups argue, taking hundreds of billions of dollars out of the consumer economy – and a “stealth bailout” of banks, which caused the housing crash through reckless and predatory lending practices, and which have received trillions of dollars in bailouts and backstops, most of which will never be repaid.

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Bank fraud investigation hailed

President Obama’s State of the Union announcement of a new investigation into bank fraud represents a victory for community groups, said National Peoples Action on Wednesday.

“We’ve been calling for a full investigation for over a year,” said Liz Ryan Murphy of NPA.  “This is a big win, but we still need to see results.

“We need a complete investigation to get to the bottom  of what they’ve done, with penalties and restitution that are commensurate with the crimes.”

The Woodstock Institute also hailed the announcement.  “Making it clear that criminal activity in the financial sector will not be tolerated is necessary to restore confidence in the mortgage market and the broader financial system,” said Tom Feltner.

Obama announced that New York Attorney General Eric Schneiderman will head a new task force looking into abuses in the mortgage origination and securitization sector.

Schneiderman’s appointment came as NPA and other groups (including IIRON in Chicago) expressed concern that the administration was pressing for a settlement in the robo-signing scandal that would release banks from legal claims covering a sweeping range of misconduct.  Schneiderman was among state attorney generals said to be raising similar concerns

Principal reduction

If it is narrowly focused on relieving claims arising from fraudulent foreclosure filings, a settlement could begin to bring relief to hard-hit communities in the form of loan modifications which reduce principal to reflect depressed home values, Feltner said.

Principal reduction is “a critical missing piece in the response to the foreclosure crisis,” he said.

NPA has argued that homeowners have lost billions of dollars of equity since the housing market collapsed due to the malfeasance of big banks, and that wholesale principal reduction would constitute a massive economic stimulus.

Both groups have called on the Federal Home Finance Authority to direct Fannie Mae and Freddie Mac, which own 70 percent of home mortgages, to allow principal reduction.

Murray said Obama should replace Edward DeMarco, acting director of the FHFA, who has ruled out principal reduction.

The president “should consider a change in leadership” at FHFA, Feltner said.



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