Members Of Congress Join Activists In Demanding Homeowner Relief
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By Isaiah J. Poole
Key voices on Capitol Hill today echoed the message that underwater homeowners need the principal on their mortgages reduced, and that the government official responsible for keeping that from happening should either change his position or step down from his post.
Principal reduction is the the critical fight going on in the housing front right now, and members of the Congressional Progressive Caucus, the financial reform group New Bottom Line, and other grassroots organizations gathered outside the Capitol to challenge the head of the Federal Housing Finance Agency, Edward DeMarco: Move on principal reduction or be removed.
Their call echoes our own campaign calling on DeMarco to get out of the way of the relief homeowners need, which has generated several thousand messages that have done directly to DeMarco's office. Click here to send your message.
DeMarco's opposition on this issue affects nearly 12 million Americans in homes financed through Fannie Mae or Freddie Mac who owe more on their mortgage than their homes are worth. One of them is Rose Gudiel, who was at the Capitol representing the Alliance of Californians for Community Empowerment. Facing foreclosure, she resorted to organizing a demonstration and was arrested—along with her aging, disabled mother—before she was granted a loan modification by her bank. However, as she described it, this modification was merely a “Band-Aid, as my house is still under water and it will continue to be under water.”
On Tuesday, President Obama announced a program designed to help homeowners refinance their homes at lower interest rates. That is a helpful step for many homeowners, but for the millions of homeowners who share Gudiel's situation, that only solves a small part of the problem. Today’s housing market has seen prices fall an astonishing 33 percent since 2008, more than the 31 percent price decrease that occurred during the Great Depression.
"The families that are here today represent millions and millions of home owners who just can't wait any longer," said Rep. Jan Schakowsky, D-Illinois. "They deserve aggressive action from the FHFA to make sure their mortgages are affordable. There have been dozens of members of Congress who have met repeatedly with Ed DeMarco, the head of FHFA, including our resident expert, Congressman Brad Miller, and each time he has not reacted as we have asked him; he has done nothing and he has been a thorn in the side of the president and Congress."
"Right now in Arizona 48 percent of the homeowners—nearly half—are underwater and facing the prospect of losing their homes, facing the prospect of foreclosure," said Rep. Raul Grijalva, D-Ariz., co-chairman of the Congressional Progressive Caucus. "Meanwhile the Federal Housing Finance Agency has failed to require those servicers, those mortgages, not only in Arizona but across the country to reduce that principal."
Schakowsky said that principal reduction would likely benefit homeowners more than any other weapon in the FHFA's arsenal, and with financial incentives now made available to lenders through the Treasury Department, "FHFA has more reason than ever to take immediate action. And so we are simply tired of waiting for answers for our communities and for our constituents."
DeMarco is a Bush administration holdover who is still in his position because Republicans in the Senate blocked the person President Obama nominated as his replacement. Some progressive activists have been urging President Obama to make a recess appointment in defiance of Congress, as he did in choosing the head of the Consumer Financial Protection Agency and filling vacancies at the National Labor Relations Board.
"It is time now for the president just to say: 'Edward DeMarco, you are fired,'" Schakowsky said.
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Isaiah J. Poole has been the editor of OurFuture.org since 2007 and also directs the Campaign for America's Future's online communications.
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This is my personal story. I am or was a real estate investor until the housing crisis of 2008. In 2005 I purchased my second investment property for $234,000. This amount was based on the realtor's appraisal. The realtor, suggested that I go through a mortgage broker he knew. The broker was working with several lender. Wells Fargo originated the loan subject to an appraisal. The appraiser was hired by the loan originator Wells Fargo. The appraisal was accepted by Wells Fargo. My loan was approved with a 6.625% 10year fixed adjustable mortgage for 30 years.My mortgage payment was $1100/mo for 10years then it will readjust.
The property is a new 2b/2b condo located in Phoenix AZ 85014. I paid a down payment of 20% ($46,800). Closing cost was not included. The condo is now appraised at below $50,000. as the foreclosures continue to rise.
It is now 2012. Based in this scenario I have already paid this property $158400 in monthly payment. I have paid $158400 plus $46,800 for down payment, which ad up to $205,200.
I worked so hard to earn an EXCELLENT credit rating and know how important it is to maintain it in order to be able to continue making investment in real estate.
The current policy does not help me refinance my mortgage because the cost of a refi loan does not make economic sense. It cost too much. Modifying my current mortgage to a lower payment does not qualify me either.
So I have a choice to either stay responsible and pay my mortgage or walk away, or foreclose my property. My conscience tells me to do the right thing and stay responsible. That is the "American Way". I could invest in more property but what incentives do I have? The housing prices are low and the interest rates are low.
Why should I do that when my government does not recognize me as a Valuable Citizen that could drive our nation back to a robust economy? I could simply pay-off my loan. But why should I, when many of us(investors) are waiting for the real estate to bottom.
Is that what our government is waiting for--A total collapse of our housing economy? Is that what it mean to fixing our economy? Hello? Knuckle heads......
The ONLY solution to our ECONOMY is either cut the ARTIFICIAL price of homes to the current value and implement a Principal Mortgage Reduction for all those properties that are "underwater" to at lease back to the same level of the land (metaphorically) or handover all the titles to CHINA. The latter is not what WE AMERICANS (real responsible Americans want to happen) WANT or do we?
The knuckle heads in power, in our government are selling us out. Call it Reganomics, Clintonomics, Bushanomics,Obamanomics--they are all the same (donkeys and elephants).
Until REAL people starts to rise and wake up and say this is ENOUGH. The criminals will steal from us like we are blind. I am not blind, are you?
Who is the enabler? who in our government is responsible for safeguarding our wealth and treasures? Do you expect the crooked government officials to lock themselves in jail?
Where is the common sense ? It's time to stay sober and take control of the things our government refuse to do. FOLLOW the MONEY and stay vigilant. Follow the crooks and put them where they belong. There are more of us honest, hard wroking people, than are crooks and liars.
You are a real estate investor and you made some bad investments. I understand this and I wish this had not happened to you. However, is this not always possible when you invest money in anything? Do you think that either Wells fargo or the government should bail you out?
Consider people who invest in stocks. If the market goes down, does the government bail them out? Or, consider people who invest in almost anything. The government's only involvement is to "scoop" away some of the profits. This has been the system for a long time. If we change the rules, who pays the cost of a bailout? Either the stockholders of a company or the taxpayer. Why should they pay. This, by the way, is the reason why I hated the bailouts in 2008-2009.
I think there is a distinction between honest investments (in good-faith) and gambling or swindling people. The latter is what actually took place in the past decades. It was not only gambling. The dealer was dishonest and decietful.
No I don't think that government or Wells Fargo should "bail me out". I expect my government to hold the "bad actors" accountable and pay restitution to the innocent victims they have harmed.
As I have said I remain committed this far (and there are many people like myself that got caught up in this immoral, irresponsible acts)in meeting my financial responsibilities; but it is high time that WE demand accountability.
Are you one of those that walked away from their property? Are you one of those actors who profitted from predatory lending practices? Do you even care about the millions of Americans and others all around the globe that have done the right thing and not evaded their financial responsibilities?
So what is it that you're arguing here? The crime has been committed and yet no one has been held accountable for the greatest thievery in the history of man-kind.
Do you work for a bank? What kind of a person are you?
Check out our new call to action video, Oh Fannie Mae at http://Doo-Occupy.org
Join us for 2 days of training and 2 days of action to Bail Out America March 31-April 3.
Bill Moyer
Backbone Campaign