Today, Representative John Conyers, Jr. (D-Mich.) issued the following statement responding to the announcement that the Federal Housing Finance Agency (FHFA) will not allow Fannie Mae and Freddie Mac to participate in principal reduction programs that would benefit distressed homeowners:
"Today's decision by Acting Director Edward Demarco flies in the face of common sense and is based on a faulty interpretation of his mandate as the conservator of Fannie Mae and Freddie Mac. The Acting Director's continued stonewalling, in the face of empirical analysis from respected housing experts and the successful adoption of principal reduction by private sector actors, is unconscionable while millions of Americans continue to face the threat of foreclosure.
"According to the FHFA's own analysis, Fannie Mae and Freddie Mac own between 74,000 and 248,000 mortgages that would benefit from principal reduction modifications. Yet, Acting Director Demarco refuses to act because, amongst other reasons, these modifications would involve the use of funds from the Troubled Asset Relief Program (TARP).
"Acting Director Demarco's job is to prevent Fannie Mae and Freddie Mac from taking on additional losses while they are controlled by the federal government. He has no duty to preserve TARP funds. In fact, TARP funds are intended to, and are currently being used to, prevent foreclosures.
"The tortured logic inherent in today's decision has made one thing crystal clear: FHFA will continue to avoid pursuing policies that would benefit homeowners and taxpayers as long as Acting Director Demarco remains the head of the agency. He should step down. If he will not, the President should end his tenure and appoint a replacement."