Demand the White House Answer Us: Will You Save
Underwater Homeowners?

By Isaiah J. Poole
April 20, 2012 - 3:26pm ET
http://www.ourfuture.org/blog-entry/2012041620/demand-white-house-answer-us-will-you-save-underwater-homeowners

If enough of us demand it, we can get the White House to
answer a simple question: Will you or will you not stand
with underwater homeowners and push for principal
reductions-even if it means pushing aside the agency
chief who is opposing that remedy?

We're asking our supporters to join with Rebuild the
Dream and sign this White House petition now calling for
"Fannie Mae and Freddie Mac to issue principal
reductions for underwater homeowners." If 25,000 people
sign the petition by Sunday, the administration has
promised to respond. As of 3 p.m. today, the petition
was less than 4,000 short of the signatures it needed.

This petition follows on the heels of our own petition
to President Obama that he should fire Edward DeMarco-
the head of the Federal Housing Finance Agency, which
oversees Fannie Mae and Freddie Mac-if DeMarco continues
to oppose principal write-downs for underwater
homeowners.

A recent report by the staff of the Federal Housing
Finance Agency has concluded that if mortgage financiers
Fannie Mae and Freddie Mac would allow underwater
mortgages to be written down to their true value, not
only would millions of homeowners would benefit but
taxpayers would save money in the long run. And that, in
turn, would stimulate the economy: The spending that
would be unleashed once the debt bubble around these
homeowners is burst could support the creation of a
million new jobs, according to The New Bottom Line.

Earlier this week Edward Luce wrote in the Financial
Times that DeMarco's resistance, and Obama's seeming
impotence in the face of that resistance, were standing
in the way of a robust housing recovery. And without a
robust housing recovery, a general economic recovery
with the kind of job growth we need would be unlikely.

"Rarely in the annals of American administrations has
one president encountered so much stubbornness from one
regulator," Luce wrote. "So far Mr DeMarco has resisted
White House blandishments to allow large write-downs of
the principal mortgages of delinquent borrowers. Indeed,
he has been blocking efforts to provide more help for
distressed homeowners since Mr. Obama took office. He
has played the immovable object; Mr. Obama, the
resistible force."

Luce's column ends with the kind of common sense that
should be at the core of how our regulators should
respond to the housing crisis. "Every American is
damaged by the bad housing market because it holds down
the rate of economic recovery," he wrote. "Reviving it
has nothing to do with morality. It is about raw,
capitalist self-interest. It is therefore also about
protecting the taxpayer. What a pity Mr. Obama is still
reluctant to enforce his own arguments."

But perhaps that can change if thousands of people
demand that the White House respond to the question:
Will you allow Edward DeMarco, a Bush administration
holdover, to keep the economy in the ditch that Bush
administration policies dug, or will you move the
obstructions aside to provide relief to underwater
homeowners and a boost to the economy?

Let's see if we can get an answer.

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