Calls for a New FHFA Head

Last February, Obama appointed a new leader to the Federal Housing Finance Agency or FHFA. Members of the House of Representatives encouraged Obama to take this important step.

The representatives that most want a new leader are Rep. Elijah E. Cummings, Rep. John F. Tierney and 45 other representatives in their group who feel similarly. They want the new leader of the Federal Housing Finance Agency to put a more effective plan in action to help homeowners avoid foreclosure and other major issues.

These representatives want a certain plan put into action. They feel not enough is being done to help borrowers in need. To set this plan into action, they asked Obama to consider selecting a leader who would agree to think about instituting a loan principal reduction plan that helps “underwater” borrowers in particular.

Currently, there are about 10.9 million borrowers who are underwater on their mortgages. These people are most at risk for having their home foreclosed upon.

Right now, the Federal Housing Finance Agency is overseeing the mortgage giants Fannie Mae and Freddie Mac. Their leader is Edward DeMarco, whom people are quite displeased with. He is considered not strong enough to deal with the onslaught of underwater borrowers. He has been accused of not using all of the Federal Housing Finance Agency’s resources to help these people.

Last summer, he also refused a request from the Treasury to organize a program that would provide debt forgiveness and principal loan reductions. There have been several calls to fire him in Washington, particularly from the representatives.

Obama has definitely considered removing DeMarco due to his unpopularity with Washington politicians and lack of drive to get the job done.

Some people have predicted that Obama would get rid of DeMarco through a December Recess appointment and the Financial Times reported that Obama planned to have him removed as soon as possible.