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As I headed to bed tonight, persuaded that Obama had won another term as President, I took

one last look at my email. A colleague and policy analyst sent an email at two minutes after
midnight with the following subject line: Ok, time to fire DeMarco, Day 1.
No text, just the subject line referencing the director of the FHFA, the federal agency tasked with
regulating the gargantuan mortgage government-sponsored enterprises (Fannie Mae and
Freddie Mac) that together hold nearly half of all US mortgages, totaling just over five trillion
dollars. Edward DeMarco has taken a hard line against reducing the principal balance on the
millions of underwater mortgages held by the GSEs. That hardline position continues to impose
incalculable loss and suffering upon those 10 million plus unlucky Americans who were caught
owning homes at the very instant the US banking industry blew up the American (and global)
The catastrophic collapse in home values that followed Wall Streets criminally irresponsible
gambling binge destroyed over seven trillion dollars of real estate wealth. It will probably take
more than a generation for many areas, such as Cleveland, Ohio, to rebuild the banker-destroyed
equity. Simultaneous with DeMarcos imperious disregard for the unfairness foisted upon
American homeowners is the increasingly blatant coddling he reserves for bankers and mortgage
investors. His latest initiative would make it easier and less risky for lenders to sell defective
loans to Fannie and Freddie. His grand idea is to loosen capital markets by stripping the GSEs of
their repurchase rights when they have been snookered into buying a lousy mortgage
misrepresented as sound and in compliance with contract terms.
Housing advocates, who see the issue of principal correction as both a fairness and economic
recovery issue, revile DeMarco and his moralistic bluster and posturing in favor of the creditor
classes. For more than a year they have been frustrated by Obamas refusal to fire him and put
another recess appointee in charge of the FHFA. The Obama administration has attempted to
explain the reluctance to oust DeMarco as a function of the renegade Senate which, they assure
us, would not confirm an Obama- selected replacement for DeMarco.
After the election, they have murmured to the advocates. We feel your pain, the day of
reckoning will come, they coo. But skepticism remains.
This is especially so when it is clear that Obama has won most of states where underwater
homeowners number in the millions: California, Nevada, Colorado, Florida, Michigan, Virginia,
Wisconsin and Ohio. With nary a word during the campaign about the plight of borrowers
indentured to bankers with no prospect for home equity for years to come, it is difficult to take
these whispered sweet nothings as anything more than, well, nothing.
But when we wake up tomorrow, at least we wont have to contend with Mr Romney who never
even bothered to express concern for the vast majority of American voters victimized by Wall
Street. Will it matter for debt-burdened homeowners that Obama has won another four years?
Probably not, if the first four years was any indication. Billions of campaign dollars up in smoke
but fear not, the election is finally over - and the duopoly perseveres.
Paul Bellamy is director of development and research at ESOP, a housing organisation in
Cleveland, Ohio