Oct. 31, 2013, Fairfax, Va.—Americans for Limited Government President Nathan Mehrens today issued the following statement praising Senate Republicans for blocking Obama nominee Mel Watt to head the Federal Housing Finance Agency, highlighting his past support of mortgage principal reductions for as many as 9.7 million borrowers who are $580 billion underwater on their mortgages, owing more on their homes than they are worth:
“More bailouts are the wrong answer for the American economy, and Mel Watt is the wrong choice to head Fannie and Freddie. Senate Republicans are to be praised for blocking him. Now they need to hold firm and insist on real reform. Instead of heading the agency with somebody dedicated to give away other people’s money, Congress should be working to bring an end to government-directed housing finance — the cause of the financial crisis — by bringing an end to Fannie and Freddie once and for all.
“Mel Watt’s past support of mortgage principal reduction raises major questions of fairness, as well as significant taxpayer concerns over reducing mortgage debt by as much as $580 billion for 9.7 million borrowers who owe more than their homes are worth. If they did it for everyone, it would put Fannie and Freddie back in the red, requiring a huge infusion of hundreds of billions of tax dollars to compensate.
“In the meantime, the program actually supported by congressional Democrats, the Making Home Affordable-Principal Reduction Alternative, would only ‘help as many as half a million homeowners,’ according to Watt. That is just 5 percent of the 9.7 million borrowers who are currently underwater on their mortgages, and yet would still cost taxpayers billions. It would just be a specialized bailout, likely tailored to prop up administration-favored favored constituencies. We don’t need it anymore than we need the government running housing finance.”
“Obama Taps Mel Watt for Fannie, Freddie to Push Mortgage Principal Reductions,” By ALG senior editor Robert Romano, May 2, 2013 at http://netrightdaily.com/2013/05/obama-taps-mel-watt-for-fannie-freddie-to-push-mortgage-principal-reductions/
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