FHFA Chief Backs Fannie, Freddie On Principal Reductions

Law360, New York (February 28, 2012, 2:49 PM EST) -- The head of the Federal Housing Finance Agency on Tuesday defended Fannie Mae and Freddie Mac's reluctance to engage in principal reductions on troubled mortgages in the face of fierce criticism from U.S. Senate Democrats seeking to change the policy.

FHFA Acting Director Edward J. DeMarco said that executives at Fannie and Freddie, the two government-sponsored mortgage giants that were placed under government conservatorship at the height of the financial crisis in 2008, have told him that reducing the principal owed by some homeowners potentially facing...
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