Foreclosure Relief and Obama

[Addison]

It all began on February 18, 2009, when a brand new President Obama, while introducing the Making Home Affordable program, described a program to help save homes from foreclosure that has never really existed. In that speech the president talked about principal reductions, loans that could be modified in bankruptcy court, and fixed interest rates of just two percent… and it would all be ours, just by calling our banks directly, or if we needed help… a government hotline or a HUD counselor.

Millions of Americans had been waiting for this president’s plan for a year or more… four million were already in or near foreclosure, and the prior administration’s Hope-4-Homeowners program had been a dreadful failure. This president was believed to be smarter, more progressive, a man-of-the-people, he would know how to save millions of Americans from foreclosure.

And, after all, we had bailed out the banks. Now our new president would make sure those same banks helped us keep our homes through the worst economic downturn in 70 years. It made perfect sense, and the crowd’s cheering was literally deafening on that February day… louder than any that I could recall hearing in my lifetime following a politician’s speech in this country.

http://mandelman.ml-implode.com/2013/03/homeowners-scheme-makes-bad-situation-worse-ends-up-in-jail/

[frazzled]

1. Blame (recently ex) director DeMarco, mostly

Mel Watts is now nominated to replace him.

Under its current leader, Edward J. DeMarco, the F.H.F.A., which oversees the bailed-out mortgage financiers Fannie Mae and Freddie Mac, has refused to put in place a White House proposal to reduce the principal on so-called underwater mortgages — a move that might prevent foreclosures and thus save the mortgage giants money, but also might expose taxpayers to additional losses.

...

Mr. DeMarco has held the position at the head of the F.H.F.A for more than three years. In the last year, especially, he has clashed with the administration over the issue of write-downs, also called principal forgiveness.

The Treasury Department has argued that write-downs would save money by reducing the chances homeowners would default. An F.H.F.A. analysis released last year seemed to show that a carefully directed program could save Fannie and Freddie money. But Mr. DeMarco has rejected the idea on the grounds that it would expose taxpayers to more losses. Fannie and Freddie have already required tens of billions of dollars of taxpayer aid.

The administration has frequently criticized Mr. DeMarco’s decision. “F.H.F.A. is an independent federal agency, and I recognize that, as its acting director, you have the sole legal authority to make this decision,” Timothy F. Geithner, who stepped down as Treasury secretary in January, wrote Mr. DeMarco last year. “However, I do not believe it is the best decision for the country.”

...

The administration has struggled to find a qualified person to take the job. There is speculation that the White House may finally be close to naming a director. The Wall Street Journal reported that officials were considering nominating Representative Mel Watt, Democrat of North Carolina, perhaps next month.

The White House declined to comment on personnel policy.

Any director would probably be named as a recess appointment because he or she would be unlikely to win Congressional approval. Many Republicans concerned about the cost of Fannie and Freddie to the taxpayer have said the two agencies should not adopt principal-reduction policies. In 2010, the White House nominated Joseph A. Smith Jr., a North Carolina banking commissioner, for the position, but his nomination died in the Senate.


http://www.nytimes.com/2013/03/18/business/economy/attorneys-general-press-white-house-to-fire-fhfa-chief.html

Yes, Obama could have fired him, so he is culpable in that regard ... but as the article suggests, Republicans would have blocked any nomination. In fact, DeMarco only became acting director because they blocked Obama's previous nominee. They may block Watt. Another sad, tangled mess in Washington.

[Addison]

2. Agreed

Obama doesn't deserve all the blame, for sure.

[elleng]

3. About demarco:

http://www.democraticunderground.com/10022779748

Discussion about him on Bashir show now.

[Addison]

4. The dilemma of losing a decent, electable Dem to an appointed position

The gamble paid off with Kerry/Warren, but doesn't always. Let's hope it works again with Watt

[elleng]

5. Yes, let's hope.

Seems to me not as likely in NC as in Mass, tho.