The Hill News

Imagine that your neighbors’ house is on fire. The family calls the fire department but, when they arrive, they’re carrying hooks and ladders but no fire hose.  As the flames begin to consume all that your neighbors have built over the years, and spread dangerously close to your own home, the firefighters explain that they’d be happy to help, after they perform several feasibility studies, run surveys, and complete a cost-benefit analysis.

That’s essentially the message Ed DeMarco, the acting head of the agency that oversees Fannie Mae and Freddie Mac, sent Americans this week.  DeMarco had promised a decision by May 1st on whether Fannie and Freddie can use the critical tool of principal reductionâ€"bringing what struggling homeowners owe down to a fair rate that they can successfully repayâ€"in our nation’s effort to stem foreclosures and rebuild our economy. But on May 1st DeMarco’s agency, the Federal Housing Finance Agency, said it was d! elaying a decision indefinitely. “FHFA continues to work on its principal forgiveness analysis and is in discussions with the Department of the Treasury,” an FHFA spokeswoman said. “A final determination…is being deferred until we conclude these activities.”

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