DeMarco Says Principal Writedowns May Save FHFA $1.7 Billion
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Fannie Mae and Freddie Mac could save $1.7 billion if they forgave principal on some troubled mortgages, the companies’ regulator said today in Washington.
The Federal Housing Finance Agency may make a decision “in the next few weeks” about whether to change its policy barring the two taxpayer-owned companies from performing such loan modifications, Edward J. DeMarco, the agency’s acting director, said in a speech at the Brookings Institution. DeMarco said he remains concerned that debt writedowns could be an incentive to default for some so-called underwater homeowners, who owe more than their properties are worth, offsetting any cost savings.