Please read the details of this as reported by The Washington Post. Working in the trenches, I know first hand how devastating it has been to homeowners that Fannie Mae has blocked the ability of banks to offer loan principal reductions. Citibank apparently offered to do so back in 2009. Why this program was canceled? The documents submitted offer no answer.
Why are people not storming the "Citadel" - storming DeFranco's office?
"....Since being appointed head of the Federal Housing Finance Agency (FHFA) in 2009, DeMarco has refused to allow Fannie and Freddie to write down loan balances, in part because he worries that some homeowners would stop paying their mortgages to get relief, ultimately costing taxpayers more money. He has been steadfast in his disapproval in recent months despite growing pressure from Obama administration officials and House Democrats to allow principal reductions....."
Why are people not storming the "Citadel" - storming DeFranco's office?
"....Since being appointed head of the Federal Housing Finance Agency (FHFA) in 2009, DeMarco has refused to allow Fannie and Freddie to write down loan balances, in part because he worries that some homeowners would stop paying their mortgages to get relief, ultimately costing taxpayers more money. He has been steadfast in his disapproval in recent months despite growing pressure from Obama administration officials and House Democrats to allow principal reductions....."
Fannie Mae hid benefits of reducing mortgages, lawmakers sayFannie Mae concluded years ago that it could substantially reduce losses by cutting the principal of some loans to borrowers in financial trouble, but it kept the finding secret, said Rep. Elijah Cummings, D-Md., the senior Democrat on the House committee that oversees the agency. Cummings and Rep. John Tierney, D-Mass., said in a letter that they learned of the finding from documents provided by a former Fannie Mae employee. The Washington Post(5/1), MSNBC/Economy Watch blog (5/1)
