What are their names? If you’ve followed the housing crisis as closely as we have, then you probably know.
Our old and unwanted cousins Fannie and Freddie.
Their omission from the settlement was perhaps its biggest flaw.
We’ve been advocating principal reduction as one of the best ways to help beleaguered borrowers, and we’re not alone in that assessment. That’s why it was at the center of the settlement.
Yet Edward DeMarco, the man behind both companies, still clings to the outdated notion that principal reduction would lead to a moral contagion among homeowners otherwise known as a “moral hazard”.
He’s forbidden Fannie and Freddie to even entertain the idea.
While President Obama and others, such as Massachusetts AG Martha Coakley have turned up the heat on DeMarco, he hasn’t budged.
DeMarco is more concerned about his political ideology than helping the American homeowners, who are in essence, is his clients.
He’s like that annoying relative that no one invited, yet keeps showing up every Thanksgiving. But DeMarco is far from the only problem.
When you have Freddie Mac trying to profit from securities that paid more if homeowners couldn’t refinance, that is proof that we are just too far down the rabbit hole.
President Obama, there is only one conclusion you can draw. Just like Old Yeller, Fannie and Freddie need to be put down. They are spoiled milk, and there is only one thing you can do with spoiled milk, pour it down the drain.
It’s been over three years since the government took them over, and still the two companies have done little to offer the American people any real relief. Fannie Mae and Freddie Mac have created nothing but a den of iniquity, where the bottom line means more than helping the homeowner.
We are starting to see some real changes to the way business is conducted in the real estate market, so we say it’s time to make a real change and kick these two companies to the curb.