Democratic Leader Nancy Pelosi released the following statement today after Acting Director of the Federal Housing Finance Agency, Ed DeMarco, refused to allow Fannie Mae or Freddie Mac to offer mortgage principal write-down relief for underwater homeowners, despite an analysis from his own agency demonstrating that such action would save Fannie Mae and Freddie Mac $3.6 billion, save taxpayers a net of $1 billion, and help 500,000 homeowners stay in their homes:
"Today, millions of responsible homeowners are underwater through no fault of their own, and it is the responsibility of our nation's leaders to do everything in our power to provide relief to these families and their communities. Recognizing the leadership of Members of the California Democratic delegation and the severe impact felt by homeowners in our state, targeted mortgage principal reduction has enormous potential to assist these households and stabilize the housing market. The FHFA's very own analysis confirms that taking this action would save money for taxpayers, help half-a-million borrowers build equity in their homes, and strengthen our economy.
"By ignoring his own agency's analysis Acting Director Ed DeMarco has undermined the health of the housing market, and jeopardized the economic security of our middle class. With nearly a quarter of the nation's mortgages still underwater, he must change course.
"Fannie Mae and Freddie Mac hold more than half of the country's outstanding mortgages, illustrating the enormously helpful economic impact that a targeted and responsible principal reduction initiative would have. Treasury Secretary Tim Geithner has offered critical resources to the FHFA to help implement responsible principal reductions. It's time for Acting Director DeMarco to pursue a policy that benefits taxpayers, helps families, and strengthens the economy."