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House Democrats urge Obama to replace DeMarco

Democratic members of Congress sent the Obama administration a letter Thursday, urging the President to make the appointment of a new head of the Federal Housing Finance Agency a priority as he moves through the first 100 days of his second term.

A staff member for Congressman Elijah Cummings, D-MD, confirmed the authenticity of the letter, with HousingWire on Thursday.

In the letter, Democrats argue against the ongoing leadership of DeMarco on the grounds that he refused "to allow the implementation of a pilot program to examine whether a principal reduction program could reduce costs to taxpayers while helping borrowers stay in their homes."

DeMarco and his supporters have defended his move as both appropriate given the scope of his mandate as FHFA Acting director and as one that is not idealogically motivated. 

When pushed on the issue of allowing principal reductions to help more underwater homeowners last year, DeMarco said, "The fact that FHFA continues to consider principal-forgiveness alternatives, including recent HAMP program changes initiated by the Treasury Department, belies any ideological tilt on our part, but rather a strict analytical-based approach to gathering and evaluating data to determine what options best fit within the legal constraints that fall upon this agency as conservator for the enterprises."

But with Obama in a second term, House Democrats are pushing the point once again.

The 30-plus Congressional members who signed the letter wrote:

"One such pilot program, which was developed by Fannie Mae and Citibank after months of study and analysis, was terminated due to unspecified 'operational' challenges. By not supporting this pilot program -- even after the Department of Treasury offered funds to help cover its operational expenses--Mr. DeMarco demonstrated that he is not interested in obtaining real-world evidence that might contradict his pre-established views."

Click here to read the full letter.



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