September 17, 2011 03:19 AM UTC

House Dems slam Obama on mortgage crisis inaction

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• by: allyncooper

When President Obama addressed the joint session on Congress last week rolling out his new jobs bill (which hasn’t yet been introduced in Congress), he briefly addressed the continuing housing crisis which is hampering economic recovery.

“We’re going to work with federal housing agencies to help more people refinance their mortgages at interest rates that are now near 4 percent. That’s a step that can put more than $2000 a year in a family’s pocket, and give a lift to an economy still burdened by the drop in housing prices”

But House Dems as of Friday were not impressed with Obama’s lack of action at odds with the rhetoric. According to Rep. Dennis Cardoza (D-CA), as reported in The Hill.

“The administration has been AWOL on this issue and the American people are suffering because of the mismanagement. In my entire political career, I’ve never seen anything this irresponsible.  

House Democrats led by Cardoza and Rep. Elijah Cummings (D-MD) requested a meeting with Edward DeMarco, acting director of the Federal Housing Finance Agency, the entity formed in 2008 as conservator of the GSE’s Fannie Mae and Ginnie Mae which were insolvent and have cost the taxpayers $145 billion so far.

But DeMarco would not meet with them, instead sending lower level employees who could not answer their questions.

Since the FHFA is an agency independent of the White House, it’s questionable how much control Obama may have over the FHFA, but it appears the administration is rudderless when it comes to specifics about new initiatives to deal with the mortgage mess in which 22% of all loans are now underwater.

According to Cordoza, at a June meeting with the Democratic Caucus, the president promised a significant housing initiative in September, but has only delivered words and not action. Referring to the administration programs such as HAMP which have fallen far short of expectations, Cordoza said “the programs that were put in place were abysmal failures”.

Full The Hill article here  http://thehill.com/homenews/ho…

Meanwhile over in the Senate, Senators Barbara Boxer (D-CA) and Johnny Isakson (R-GA) have introduced a bill to eliminate the loan-to-value restrictions and fees for refinancing Fannie and Freddie loans into lower rates. This tactic would address what has been obvious for too long, i.e the devaluation of housing prices which is scuttling an economic recovery.

However this is going to cost the federal treasury more money, and the banksters  want it tied to a waiver of the representation and warranty risks so they get off the hook for their malfeasance and fraud. (The civil suits FHFA filed against the major banks and servicers a couple weeks ago are rep and warranty claims).

So as politicians of all stripes scramble to do something to fix the housing mess with the election looming next year, the frustration that little done so far has made much of an impact is apparent. Boxer implored her fellow lawmakers on Wednesday to do something and  “get in front of this crisis for once”.

But so far, the housing and mortgage mess seems to have a life of it’s own, like a malignant tumor that no amount of radiation can kill.