Federal Housing Finance Agency Acting Director Edward DeMarco is denying relief to as many as half a million struggling homeowners by refusing to allow Fannie Mae and Freddie Mac to engage in principal reduction, AFL-CIO President Richard Trumka said Tuesday. Trumka's comments came after DeMarco announced he will continue to prohibit Fannie Mae and Freddie Mac from participating in the Obama Administration’s mortgage principal reduction program.

Trumka says:

As Treasury Secretary Tim Geithner has observed, providing principal reduction for struggling homeowners is also in the best interests of taxpayers. The Federal Housing Finance Agency’s own analysis has found that participating in the program could save $3.6 billion for Fannie Mae and Freddie Mac and $1 billion for the taxpayers.

The combination of a real estate bust, high unemployment, and falling real wages has created the perfect storm for homeowners.  Millions of working families owe more on their mortgages than their homes are worth.  The U.S. economy cannot recover until decisive action is taken to address the housing and foreclosure crisis.

Read the rest of Trumka's statement here.