FHFA, Fannie and Freddie Stage A Last Ditch Effort to Squash Homeowners

The Federal Housing and Finance Authority (FHFA) is taking dramatic actions against homeowners, and cities working to fix the housing crisis.  Just, this morning, Mark Harris, a Desert Storm veteran in Atlanta, who was highlighted in the Alliance’s report Wasted Wealth: How the Wall Street Crash Continues to Stall Economic Recovery and Deepen Racial Inequity in Americawas forcibly evicted from his home at gunpoint this morning.  (Read Mark’s story here)

Another eviction targeting an outspoken homeowner fighting to stay in her home , Olive Hendricks of Boston, MA, is scheduled for Tuesday of next week.  And FHFA is using the threat of lawsuits against Richmond, CA for using its power to resent mortgages through the use of eminent domain.

After years of inaction to help families actually stay in their homes, reduce the principal on underwater mortgages, and any other policy aimed at shoring up the housing market this abrupt, dramatic volley of FHFA actions against homeowners is quite amazing.

Perhaps to Ed DeMarco the acting director of FHFA, in a nod to a longstanding Washington tradition, is looking to keep his foot in the revolving door with Wall Street.  Washington being a passive obstacle to solving the crisis is one thing but the decisiveness and speed upon which FHFA is moving now to actively squash cities from going around a gridlocked Washington is quite another.

The Shot Heard ‘Round Wall Street came as Richmond announced on July 29, 2013 that the city would use eminent domain as a sump pump to rescue underwater homeowners and the cities dealing with the repercussions.  A process that would first offer the banks a buyout at current market value for the underwater homes, would progress to the city’s use of eminent domain to seize mortgages and sell it back to the homeowners at current market rates.

Homeowners have been fighting back for years against abuses by the banks, recently many took to the streets in protests against the Department of Justice. Protestors took on the DOJ for its unwillingness to prosecute Wall Street Banks and executives who time and again have been caught red handed engaging in fraud, falsifying documents, and enacting illegal foreclosures.

Now that homeowners are lining up with local officials whose interests are more closely aligned and are further from Wall Street’s expansive political reach, FHFA is all of a sudden a quick moving nimble government agency.  This kowtowing to Wall Street is appalling.  DeMarco’s true allegiances are shining through, more obvious than ever.

The Alliance for a Just Society and our national partners at New Bottom Line and the Home Defenders League have been campaigning to approve President Obama’s nominee to replace DeMarco, Rep. Mel Watt of North Carolina.  Sign our petition calling on the Senate to hold a floor vote to appoint Rep. Watt, officially removing DeMarco and ending his deplorable legacy.