Help Underwater Homeowners & Strengthen the Economy
Stimulate the Economy by Reducing the Principal of Underwater Homeowners
Nationally, there are almost 16 million underwater homes, worth $2.8 trillion, that are $1.2 trillion underwater. Resetting those mortgages to fair market value would save the average underwater homeowner $543 per month, pumping $104 billion into the national economy every year. This would create 1.5 million jobs nationally.
The housing crisis is rooted in illegal activity by lenders and Wall Street and inadequate rules and enforcement. The misconduct included predatory sub-prime lending, targeting of senior citizens, veterans, and communities of color, and bundling and pawning off flawed mortgages, avoiding accountability. Those forces combined with record long-term unemployment to bring our economy to the brink of collapse, and continue to jeopardize our economic recovery.
Principal reduction is the bold plan we need to fix the housing crisis, create jobs, and reset the economy. This includes replacing Ed DeMarco, interim director of FHFA, which oversees Fannie Mae and Freddie Mac. DeMarco is obstinately and ideologically opposing principal reduction, despite its proven benefits for homeowners and taxpayers.