May 1, 2013 1
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: