Twenty-one members of Congress sent a letter to Federal Housing Finance Agency (FHFA) Acting Director Edward DeMarco urging him to encourage principal reductions on loans backed by Fannie Mae and Freddie Mac.
“We do not urge that the enterprises reduce principal on mortgages as a kindness to homeowners,” the letter stated.
Instead, the congressmen support principal reductions on the basis that they will save taxpayers from some further potential losses.
The lawmakers cite first-quarter data from the GSEs stating 17.7 percent of Fannie borrowers are underwater, as are 19 percent of Freddie borrowers. These borrowers, they say, “are obviously at great risk of eventual default.”
Read more...DSNews.com - Congress Calls for Principal Reductions from GSEs
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