More of This

At a hearing before the Senate Banking Committee, the senior Senator from the Commonwealth of Massachusetts cut Mel Watt, the Chairman of the Federal Housing Finance Agency, a well deserved new asshole:

What started as a dry, lame-duck session hearing on the Federal Housing Finance Agency in the Senate Banking Committee on Wednesday, got heated when U.S. Sen. Elizabeth Warren, D-Mass., went guns blazing after the FHFA director.

Warren, an outspoken progressive and a likely candidate for the 2016 Democrat presidential nomination, went on the attack during FHFA Director Melvin Watt’s first hearing before the committee, saying that he’s never done anything to help homeowners who are underwater and facing foreclosure.

The hearing started benignly enough, with Watt's prepared remarks delivered in a measured tone. That soon ended, when Warren took the mic.

Warren is known for aggressively grilling witnesses, but this was an unusual case of a “blue on blue” attack, as Watt is a former congressional Democrat and Obama appointee, and considered a strong advocate for affordable housing and homeowner assistance.

It does not matter what Watt was.

If you are working on housing in the Obama administration, your role is to coddle the criminals working for Wall Street at the expense of the ordinary American citizen, even if it costs the taxpayer money:

Five million families lost their homes during the financial crisis and millions more are still struggling,” Warren said, prefacing her questions to Watt. “According to the latest data from CoreLogic…another 5.3 million homeowners remain underwater on their homes. And people are continuing to lose their homes every day in foreclosure.

“We talk a little bit about the law here, now one of your duties under the law. One of your duties is to conserve the assets of Fannie and Freddie, but another duty given equal importance by Congress … is to implement a plan that seeks to maximize assistance for homeowners and take advantage of available programs to minimize foreclosures,” Warren said.

She went on to recite that Congress explicitly included reduction of loan principal as an option for the FHFA to use.

“Principal reduction is often a win-win that both helps Fannie and Freddie and helps a family,” she said.

She cited a 2013 Congressional Budget Office study found that even a modest principal reduction plan for Fannie and Freddie mortgages could help 1.2 million underwater homeowners, prevent 43,000 defaults and save Fannie and Freddie about $2.8 billion.

………

Watt appeared a little shaken by the line of attack.

“It’s probably an overstatement to say it’s not been a priority,” Watt stammered. “It’s just a very difficult issue. The reason it is difficult is because we are looking for exactly what you said – a win-win situation. We have to do this in a way that is responsible, otherwise we just reduce principal for everybody across the board…is not what anybody I think is advocating for, so then we have to decide what is a responsible way to do that—”

Warren cut him off.

“Chairman Watt, you have had a year to do that, you have known for five years before that what the problem was, we have two studies coming out showing that Fannie and Freddie could make money by doing this,” she said. “In the meantime you have done the reps and warranties, the buyback policy, private mortgage insurance rules, a whole list of tough technical things, and I applaud you for doing that, but people have lost their homes in the last year and every day that you delay more families lose their homes. There are 5.4 million families out there underwater so I want to know when are you going to have an answer on this?”

See my earlier comment about Obama's priorities.

For all the flak that I have thrown at exiting Attorney General Eric "Place" Holder, the buck stops at 1600 Pennsylvania Avenue, and the reason that nothing has been done to fix the cesspools of corruption is because Barack Obama does not want the swamps drained.