AMY GOODMAN: As Republican primary voters cast their ballots today in Florida, presidential candidate Mitt Romney is surging ahead of his rival Newt Gingrich in the polls. Florida has one of the country’s highest foreclosure rates. Forty-five percent of homeowners are underwater, owing more for their homes than their worth. Many are wondering how the candidates intend to help people who have lost their homes in the wake of the subprime mortgage crisis. Mitt Romney has said the country needs a president who helps lending institutions think creatively.

MITT ROMNEY: One of the reasons why people lose jobs, of course, is they lose jobs. We’ve got a troubled economy. People lose homes as they lose their jobs. Now, the banks aren’t bad people; they’re just overwhelmed right now. The right course for America is to have a president who understands how to help our lending institutions be creative and find ways to keep people who can meet their payments stay in their homes. And I’ll do that.

AMY GOODMAN: Meanwhile, Newt Gingrich was recently questioned by Suzanne Goldenberg of The Guardian on how he intends to help people who have lost their homes.

SUZANNE GOLDENBERG: Mr. Speaker?

NEWT GINGRICH: Yes, ma’am?

SUZANNE GOLDENBERG: We’ve been talking to people who are facing foreclosure, who are being foreclosed on. And one thing we keep hearing is that the policies that they’re hearing from you about changing the tax structure, freeing up business, they don’t seem to see the connection between their individual situation. What could you say today that would show that—how that connection is made between top—policies at the top and down? And how would you show that you personally understand their situation?

NEWT GINGRICH: Well, I would say, first of all, that when Congress comes in on January 3rd, I’m going to ask it to repeal three bills. I’m going to ask it to repeal Obamacare, Dodd-Frank and Sarbanes-Oxley. Dodd-Frank is a direct hit on the housing system in Florida. Dodd-Frank kills small banks, drives down small business, and makes it very difficult to have housing loans. The federal regulators are very anti-housing loans. I just had a friend who bought a house in a circumstance where it was a short sale. He put—he offered in May, and he completed in December. And that’s the impact of the federal government. That’s entirely the impact of the federal government. So you get the regulators out of the way, and you will in fact find it easier to sell houses, and you’ll see the economy—and you’ll see the price of housing go back up.

AMY GOODMAN: That was Newt Gingrich.

Well, as homeowners across the nation struggle with foreclosure, we look at a new investigation by ProPublica and NPR News that reveals how the taxpayer-owned mortgage giant, Freddie Mac, made multi-billion-dollar investments that profited if borrowers stayed stuck in high-interest mortgages. Freddie Mac began increasing these investments dramatically in late 2010, at the same time it was making it harder for homeowners to get out of such mortgages. Now several U.S. lawmakers and prominent economists are calling for Congress and the White House to end this financial conflict of interest. All of this comes just one week after President Obama promised “no more red tape” for homeowners looking to refinance.

For more, we’re joined by one of the journalists who broke this story, Jesse Eisinger. He’s a Pulitzer Prize-winning senior reporter at ProPublica, covering Wall Street and finance. Eisinger’s recent piece is called “Freddie Mac Bets Against American Homeowners.”

Welcome to Democracy Now!, Jesse.

JESSE EISINGER: Hi. Thanks for having me.

AMY GOODMAN: Lay it out. What did you find?

JESSE EISINGER: Sure. What we found is that Freddie Mac entered into some complex mortgage securities investments, starting to ramp up, really, in late 2010. And what these investments did essentially is to take a kind of risky slice of a complex mortgage arrangement and bet that people could not refinance their mortgages. They would lose money if lots of people got refinancings. At the same time, they made it harder for people to get those refinancings, because Freddie is one of the key gatekeepers about who gets loans for their homes.

AMY GOODMAN: Explain who owns Freddie.

JESSE EISINGER: Freddie, right now, is owned by taxpayers. It used to be a quasi-government-private partnership. But in 2008, it failed, and taxpayers took it over. And now it’s run by the government agency that also regulates it, the Federal Housing Finance Agency.

AMY GOODMAN: So it’s basically owned by the very homeowners it’s betting against.

JESSE EISINGER: Exactly. We own the—we own Freddie Mac.

AMY GOODMAN: How did it get involved with betting against refinancing mortgages?

JESSE EISINGER: Well, it has a—it has a multi-hundred-billion-dollar investment portfolio, and it’s making investments all the time and doing complex kinds of things to protect itself from big swings in interest rates, for instance. But what Congress has done and the U.S. Treasury has done is they said, when they took these companies over—Fannie Mae and Freddie Mac are the two companies they took over—they said, “You have to reduce your portfolios. We want you to reduce your portfolios because you’re taking too much risk.” So this can be seen as part of that, which is actually somewhat violating the spirit of that, because they’re selling off investments, but they’re actually keeping the risk of them. So they’re complying with the letter, but not the spirit, of the intent.

AMY GOODMAN: Isn’t Freddie Mac supposed to make it easier for people to be able to get a mortgage?

JESSE EISINGER: Yes. One of the mandates of Freddie Mac is that it’s supposed to be making loans available to people, helping the housing market and helping banks make loans available to people. They insure loans. And the mandate is for them to make financing available.

AMY GOODMAN: Talk about Gingrich’s ties to Freddie Mac.

JESSE EISINGER: Well, Newt Gingrich, who has nothing to do with our story—he’s not mentioned in our story—but he has run into political trouble because he consulted for Freddie Mac and made over a million dollars, I believe, consulting with them. The question was, what was he actually doing? And he came out and said that he was giving his services as a historian, academic historian, but he’s been criticized because it looks like lobbying.

AMY GOODMAN: Freddie’s regulator, the Federal Housing Finance Agency, late Monday issued a statement saying it began assessing Freddie Mac’s controversial investment strategy last year. The agency said that, in December, quote, “Freddie Mac agreed that these transactions would not resume pending completion of the examination work.” Talk about the Federal Housing Finance Agency role in all of this.

JESSE EISINGER: Well, this is very interesting. So, this is a relatively new agency that was created after the old agency that oversaw these was unwound. And these guys don’t just regulate Fannie and Freddie, they also are the conservator for Fannie and Freddie. Fannie and Freddie are in conservatorship. And so, what that means is that they’re actually like the board of directors and the shareholders of this company. The federal government, this regulator, is responsible for these companies’ decisions, ultimately. And they’re headed by an acting director now that the Obama administration has butted heads with and has tried to essentially get rid of, but they can’t.

AMY GOODMAN: We’re also joined from Irvine, California, by a homeowner who could face eviction this week by Freddie Mac, which, with JPMorgan Chase, foreclosed on his house in June. Arturo de los Santos and his family began reoccupying their home in Riverside after the banks foreclosed on it. He’s a former marine who has lived in his house for almost a decade with his wife and four kids.

Arturo de los Santos, welcome to Democracy Now! Explain your situation right now.

ARTURO DE LOS SANTOS: Good morning.

What I was doing, I was having a—I was doing a loan modification. And during my loan modification, we received a call the day before our house went to sale, and they sold the house. And eventually, we were evicted. When we were evicted, two weeks after we were evicted, I received a letter with—saying we had been approved for the loan modification. So, in December, we reoccupied the house. We were trying to get the bank’s attention to review our case again. We couldn’t believe that after they had evicted us, they modified our loan. When—the day before they sold the house, I called them and told them—this is the third time I had applied for a loan modification. I asked them—somebody—they called the house saying they were going to sell it the next day. So I called, and I told them, “I thought we were doing the loan modification.” And they go, “Well, we have a loan modification department and a foreclosure department, and the foreclosure department decided to sell the house.” So they sold the house. So, when we received the loan modification two weeks after we had been evicted from the house, I decided to fight back, and we reoccupied the house in December. And just this week, actually on Sunday, I received a letter that I have a court date February 2nd for—they’re trying to get a court order to evict us from the house.

AMY GOODMAN: And this is Freddie Mac and JPMorgan Chase?

ARTURO DE LOS SANTOS: Correct. The court order—the court date is for Freddie Mac. So what we plan to do—we set up a website, www.makebankspaycalifornia.com. And if—we’re going to put up tents. And we have supporters from different groups. The main group is ACCE, Alliance of Californians for Community Empowerment. So we’re going to—we have supporters that are going to stay at the house. So, if we do get evicted, we have people there supporting us.

AMY GOODMAN: Arturo de los Santos, what was your reaction to Jesse Eisinger’s story, learning that Freddie Mac had bet against homeowners?

ARTURO DE LOS SANTOS: I think that has a lot to do with it. Like I said, we were working with the bank. And during our loan modification, I would call them, and they would reassure me everything was going fine. And then I find out, a day before they sell the house, that their foreclosure department had decided to sell the house. So it’s—I felt like I was being tricked. The loan modification had told me not to make any more payments. I applied three times. The first time I was denied, they told me not to make any more payments. And I think what happened is, one of their departments, which was the loan modification department, told me not to make payments, while their foreclosure department didn’t know they had told me that. And they were thinking I was delinquent. So, I told—the first time I was denied, I told them my income was back to normal, my hours at my job were back to normal, so I could make my original payments. And they wouldn’t accept any more payments. So I’ve been trying to work with the bank, trying to make my payments, and they won’t accept any payments.

AMY GOODMAN: How has Occupy Riverside helped you, Arturo?

ARTURO DE LOS SANTOS: They have supported me. Actually, Occupy Riverside and Occupy L.A., when we reoccupied the house on December 6th, they supported me. They were at the house until—almost 'til the end of the year. And they've been supporting me, having people there, make sure there’s a presence at the house.

AMY GOODMAN: Jesse Eisinger, how typical is Arturo’s story?

JESSE EISINGER: Well, my understanding is it’s extremely typical, that this has been an enormously frustrating situation for millions of homeowners trying to get modifications. In fact, our story deals with refinancings, which is kind of distinct from modifications. There’s a federal program that has been widely viewed as a calamity, trying to deal with modifications, helping homeowners who cannot afford their loans, and maybe in homes that are underwater, as you said, or their interest rates have skyrocketed. And then there is a separate category of people who, for our story, what’s relevant is that these people are not—they’re not delinquent on their loans. They are paying their loans, and they would benefit from a lower loan, but they otherwise don’t have deeply tarnished credit. They may have some issues, but it’s nothing spectacular. And what they would benefit from is a lower mortgage rate.

AMY GOODMAN: Jesse Eisinger, what do you make of Gingrich’s claim that there’s too much regulation of the housing industry?

JESSE EISINGER: Well, I mean, that’s a fairly comical and bizarre assertion to make, because in the lead-up to the housing crisis, most of these loans were unfettered by regulation. The most troubled activities, like collateralized debt obligations and credit derivatives, were completely unregulated. So, there’s no indication that onerous regulation led to either the housing bubble or the financial crash. But this is a line that the right has propagated since the housing crash and since the financial crisis, and it’s all typical. But there’s really little evidence to support it.

AMY GOODMAN: Jesse Eisinger, I want to thank you very much for being with us.

JESSE EISINGER: Thank you.

AMY GOODMAN: Pulitzer Prize-winning reporter. His piece is called “Freddie Mac Bets Against American Homeowners.” He writes for ProPublica. This piece was done with ProPublica and NPR News. Arturo de los Santos, thank you for being with us. He and his family began reoccupying their home in Riverside, California, last December after JPMorgan Chase and Freddie Mac foreclosed on it in June. He is a Marine veteran.

This is Democracy Now!, democracynow.org, The War and Peace Report. When we come back, the Sundance documentary prize film, the prize-winning film called The House I Live In. Stay with us.