New Bottom Line: Enough Speeches, Time for Action on Housing. Dump DeMarco and Support Principal Reduction

Statement of Tracy Van Slyke, director of New Bottom Line on the State of the Union Address:

What we heard from President Obama tonight was another good speech. But for millions of underwater homeowners good speeches are not enough. They want, and need, action to fix our housing system. President Obama has made big promises before. Now it is time to deliver on meaningful reforms.

While President Obama spoke about his administration’s refinance proposal, this policy in no way deals with the vast majority of underwater homeowners who have suffered for years since the big banks broke our economy.
It is time the President and his administration puts its full support behind principal reduction—resetting mortgages to current market value-- and Wall Street accountability. The first major action that President Obama can take is to immediately announce a nominee to replace Ed DeMarco, the Bush-appointed Acting Director of the Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac. DeMarco has blocked principal reduction at Fannie and Freddie, which together hold or control well over half the mortgages in the US, despite its proven benefits to homeowners, taxpayers and the economy.

For everyday, DeMarco stays in office under Obama’s watch, millions of homeowners and families suffer.

Tonight’s State of the Union also marked a year since President Obama announced the formation of the Residential Mortgage Backed Securities Task Force—the state and federal multi-agency effort to investigate big bank fraud. The lack of results of this task force is a major disappointment to millions of people who are looking to the administration to hold Wall Street accountable for the overwhelming number of abuses they perpetrated on the American public.

President Obama’s effort to rebuild our economy will only succeed if he starts moving real change. He can start by immediately nominating a new FHFA director that will move the fair and needed policies to support homeowners and move to support robust investigations into big banks abuses.

The time for speeches is over. It is time for action.