Force Fannie, Freddie To Lower Loan Principals: Lawmaker

Law360, New York (February 1, 2012, 7:13 PM EST) -- Rep. Maxine Waters, D-Calif., introduced a bill Tuesday in the U.S. House of Representatives that would require the government-sponsored housing giants Fannie Mae and Freddie Mac to reduce the principal on millions of loans they own or that they guarantee.

The measure, H.R. 3841, the Principal Reduction Act of 2012, would require the two government-sponsored enterprises to reduce the principal on "underwater" homes — those where the mortgage amount exceeds the home's value by more than 20 percent — to a 90 percent loan-to-value ratio....
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