It’s been five and half years since the largest economic collapse in 4 generations, and fiscal policy is still being executed in a way to favor the banks and not regular folks. We’ve subsequently seen a “jobless” recovery from our recession and are now seeing a “houseless” rebound of home market. But why?
It’s clear that the Obama Administration hasn’t done nearly enough to address the housing collapse. The HAMP program wasn’t nearly enough with too many hoops for homeowners and was voluntary for banks to participate. The latest solution put forth to address the 16 million homeowners who are currently underwater on their mortgages, writing down principal to market value, is being derailed by Ed DeMarco. He’s the temporary head of FHFA which oversees Fannie Mae and Freddie Mac, the largest loan holders in the country.
Writing down principal for folks would have ripple effect through the economy. First, it would stabilize communities by ending the foreclosure crisis, then it would ensure steady revenue streams for municipalities and states, and lastly it would kick start the home market again as those who are locked into paying more than their home is worth could feasibly sell their home if needed.
President Obama needs heed his mandate from the November elections and remove Ed DeMarco in his first 100 days in order to jump start the economy and make good on his campaign promises to get the economy back on its feet.
In fact, with the release of a letter from 45 Representatives in Congress demanding that President Obama name a permanent director of FHFA the White House needs to make this happen within the first 100 days.
See the New Bottom Line’s Response to the letter here: