By Deborah Solomon
Edward DeMarco may want to be late for dinner.
About 150 protestors plan to gather in front of DeMarco's Maryland home this afternoon to hand a pink slip to the acting director of the Federal Housing Finance Agency. Calling themselves the "Fannie Freddie 99 fighters," the protestors plan to "fire" DeMarco for his continuing resistance to principal forgiveness for loans backed by mortgage giants Fannie Mae and Freddie Mac. They intend to make "demands" that include "properly considering homeowners for permanent affordable loan modifications" and "offering foreclosed properties to former owners and/or local non-profits at value rather than selling to hedge funds," according to a press release.
The protest follows another demonstration that took place Thursday morning in front of Fannie's Washington, D.C. office. That event, which disrupted traffic on one of Washington's main traffic arteries for about 30 minutes, culminated in the arrest of five people for refusing to get out of the road.
It's not clear what effect the DeMarco protest might have other than enraging his neighbors in the Washington suburb of Silver Spring, who will no doubt resent yet another demonstration interfering with their commute. The object of attention -- DeMarco -- is unlikely to be home at 5 p.m. (This may be a government town, but most top officials don't work 9-to-5 hours.)
Still, it may help to keep pressure on DeMarco, whose intransigence is keeping millions of homeowners from potential relief that would enable them to keep their homes. About 4 million of the loans backed by Fannie and Freddie are "underwater," meaning the mortgages are worth more than the home. As Bloomberg View has written, cutting a chunk of the outstanding principal could go a long way toward restoring equity in those homes and preventing another wave of foreclosures.
One person whose home is not underwater is DeMarco. According to Maryland property records, DeMarco bought his three-bedroom, split-level brick home in 1992 for $230,000. It was most recently assessed at $424,020.
DeMarco could no doubt increase the value of his home -- and many others -- by allowing principal forgiveness, since more foreclosures will only further depress home prices. True, the housing market is showing signs of life but it's not out of the woods. Helping restore equity for people who need a little help to stay in their homes would be a lot more fun for DeMarco than sleeping at the office.
(Deborah Solomon is a member of the Bloomberg View editorial board. Follow her on Twitter.)
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-0- Sep/27/2012 20:13 GMT