Support for Homeowners

underwater-mortgages-main-1.jpg15.7 million American families today own homes that are financially "underwater" (the homes are worth less than they owe on them). That’s one in three mortgages. We all remember when buying a home was considered a "safe bet." It turns out that millions of Americans ended up taking out artificially high loans because of banks’ recklessness and fraud. In the end, banks got bailouts. But America’s homeowners have been left high and dry.

Few will be able to pay off this inflated debt; being underwater is the primary cause of foreclosure. Default rates for underwater homeowners are at an incredibly high 20 percent. As long as this anchor of debt remains on the books of the banks, foreclosures will increase, the housing market will struggle, and the entire economic recovery will continue to stall.

But solutions to fix the problem exist—they start with relieving homeowners. With partners and allies, including the New Bottom Line, we are pushing for policies that will free homeowners from the burden of unfair mortgages, allowing them to start businesses, spend money in their local economies, and kick-start a more balanced recovery:

  • Principal reduction. By rewriting underwater mortgages to reflect their lower market value, experts agree we could jumpstart the housing market and the entire economy. As Mark Zandi, Chief Economist at Moody's Analytics, said, principal reduction has "the best odds of ending the housing crash quickly and definitively." We are pushing for principal reduction, nationwide, to right the market and relieve millions of Americans.
  • Refinance options. Almost half of all homeowners nationwide pay interest rates that are higher than the market standard today. But since high interest rates mean high profits, the same banks that caused this mess are making it difficult to refinance—especially for underwater homeowners. Every homeowner should have the opportunity to take advantage of today’s low interest rates, lowering their monthly expenses so they can get back on their feet.
  • Holding banks accountable. We’re also working to make sure that those who caused our economy to crash—and who received bailouts for their troubles—are held accountable. Only through a strong, swift investigation into mortgage fraud by banks and lenders can we restore justice and prevent future housing bubbles.



We're lifting up underwater homeowners to tell their stories—of banks giving absurd reasons for not cutting them a break, of struggling to meet unwieldy monthly payments, of working together to call for change. Check out our America Underwater Tumblr blog to see photos and read stories from families struggling under the housing crisis.

We're also pushing for President Obama to fire Ed DeMarco, director of the Federal Housing Finance Authority (FHFA), who is single-handedly blocking principal reduction for all homeowners with a loan through Fannie Mae and Freddie Mac.

Media investigations have turned up new evidence against DeMarco, including a revelation in The Los Angeles Times that he hid evidence of principle reduction's cost-saving benefits. And Nobel Prize-winning economist Paul Krugman has written not one but two hard-hitting editorials against DeMarco inThe New York Times.When we first started calling for DeMarco's removal, he was the most powerful man you’ve never heard of. Now, more than 115,000 people have signed our petition to fire DeMarco, and a slew of leaders, from Rep. Barney Frank (D-MA) to CA Attorney General Kamala Harris to Treasury Secretary Timothy Geithner, have called on DeMarco to change his stance.


Our Hope for Homeowners campaign is pushing to make it easier for struggling homeowners to refinance their home loans by eliminating roadblocks—like a burdensome application process, strict eligibility requirements, and expensive appraisals. We’re uniting allies to speak with one voice, pushing homeowner stories into the media, calling attention to the problem on national TV, and supporting community leaders to organize their neighborhoods to support the issue. Helping homeowners lower their monthly payments will be a good boost for our economy. It will help folks keep their homes and build equity, and leave more money to spend on goods, services, and local businesses—what economists agree is the most important step towards a full recovery