Democrats’ efforts to reduce mortgage principals for hundreds of thousands of borrowers are stymied by one man, ProPublica claimed: Edward DeMarco, head of the Federal Housing Finance Agency.
DeMarco, who the Washington Post has called “the most powerful man in housing policy,” has maintainted that principal reductions are too expensive for FHFA Fannie Mae and Freddie Mac, which were bailed out by the government, and as such are closely monitored. And as DeMarco heads the administration that regulates Fannie and Freddie, he has effectively blocked any moves toward broad principal reduction, ProPublica said.
Congressional Democrats and some state attorneys general have spoken out against DeMarco. Maryland Rep. Elijah Cummings even said “he and he alone stands in the way of hundreds of thousands of people, if not millions, being able to [literally] get a new lease on life.”
But, as ProPublica pointed out, there are ways the Obama administration could get around DeMarco, such as name a replacement or push him to step down. And there is the fact that the FHFA, created in 2008 at the height of the financial crisis, does not anywhere clearly define for which “causes” he could be fired, the public interest news organization noted. [ProPublica]