Jordan Estevao is the Hold Banks Accountable campaign director at National People’s Action, a network of grassroots organizations that uses direct action to advance a national economic and racial justice agenda.
During the week of May 20, 1,000 families facing foreclosure, clergy and community leaders from across the country did what President Obama should have done months ago: deliver a pink slip to Ed DeMarco, acting director of the Federal Housing Finance Agency (FHFA).
They traveled to Washington, DC, boarded buses and flooded the lobby of the FHFA to fire the man who is single-handedly prolonging the foreclosure crisis and standing in the way of economic recovery.
Conservative groups are attempting to portray Obama as a Wall Street pawn, claims that are difficult to refute when he continues to hide behind the likes of DeMarco, an interim head who serves at the president’s pleasure.
A Bush-era bureaucratic holdover, DeMarco oversees Fannie Mae and Freddie Mac, which hold over half the mortgages in the country. DeMarco has consistently refused to support mortgage principal reduction, even as economists across the political spectrum agree that it is the only way to fix the housing crisis and reset the economy. Principal reductions clearly prevent foreclosures, and DeMarco himself admitted in an April 10 speech to the Brookings Institute that principal reductions would save taxpayers $1.7 billion dollars.
After committing to Congress and the administration to provide justification for his opposition to principal reduction by the end of April, DeMarco recently told them that he didn’t have an answer and would put off the question indefinitely. Every day that he doesn’t act, another 6,296 homes get a foreclosure notice in the mail.
DeMarco is defying Congress and the president. He is in direct violation of his Congressional mandate to prevent foreclosures and save taxpayer money.
Principal reduction, or restructuring a family’s mortgage debt, makes financial sense for both the family and the lender. Lenders lose an average of $60,000 on each foreclosure, and in heavily affected states, that number ranges from $115,000 to over $250,000. Writing down a family’s mortgage is much cheaper, keeps the family in their home, their children in school and the community whole. That’s why several mortgage servicers are doing more and more principal reductions to avoid foreclosures. It just makes sense.
DeMarco was appointed to stop foreclosures and save the taxpayers money. He has failed to do either. National People’s Action, along with a growing chorus of economists, members of Congress and homeowners, have repeatedly called for him to be removed from his office. Tired of waiting for President Obama to fire DeMarco, the community leaders visited the FHFA headquarters and filled it with chants that made their demand clear: “What are we? Sick and tired! We want Ed DeMarco fired!”