REUTERS-

Edward DeMarco, the temporary director of the Federal Housing Finance Agency, continues to endure blistering criticism for refusing to allow Fannie Mae and Freddie Mac to pay for large-scale principal reductions for underwater borrowers (those who owe more than their homes are worth) or to facilitate refinancings for those stuck with high interest rate mortgages.

The embattled regulator says he is merely trying to prevent Fannie and Freddie from adding to the more than $190 billion in losses that taxpayers have covered since September 2008. But Representative Elijah Cummings has labeled him “the biggest hurdle standing between our nation and the recovery of the housing market.” House Democrats have accused him of hiding data purportedly proving that principal reductions would save money and reduce foreclosures. And Representative Barney Frank has called for his resignation.

Beating up DeMarco may prove cathartic for policy makers looking to assign blame for economic doldrums. The proposed remedy, however — having taxpayers pay for principal writedowns and mass refinancings — would do little to solve the nation’s housing woes.

[REUTERS]

Comments

comments