Wednesday, November 7, 2012

Get Ready For The Government To Eat Billions In Load Modifications

This man is Ed DeMarco.
He’s the acting head of the Federal Housing Finance Authority (FHFA). He’s going to lose his job in the next six weeks.
Democrats want to go back to the good old days when Fannie and Freddie were tools of both the Congress and the Administration. The Dems want the D.C. mortgage agencies to write off all underwater loans. The goal is to socialize the losses that borrowers are faced with.
DeMarco has been under attack by the liberal wing of the Democratic Party for the better part of a year.  Democrats have wanted debt relief for underwater homeowners. DeMarco’s job as the head of the FHFA is to “minimize taxpayer losses at Fannie and Freddie”.  As a result, he has a conflict with broad based principal reductions. “Very Important People”, like Paul Krugman, have been attacking De Marco for months.
With the election over, Obama doesn’t have to play Washington politics any more. He can afford to piss off powerful guys like Senator Shelby. And that’s exactly what he is going to do.
Sometime between Christmas and New Year’s, Obama will fire DeMarco, and he will make an executive appointment to replace him. Whoever is the new boss at FHFA on January 1, will have clear orders on what to do. A hallmark of Obama’s second term will be wide scale mortgage debt relief.
The driving forces to kick DeMarco out (and get a pro-principal modification guy/gal in) has been these two Congresspersons:

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