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Sacs Goyard Pas CherHelp and Contact UsTerms of ServiceRSS Ad ChoicesThe federal regulator for government backed mortgage giants Fannie Mae and Freddie Mac said Tuesday that he will not allow the firms to reduce loan balances of struggling homeowners, frustrating the Obama administration as it looks for ways to boost a floundering economy.Edward J. DeMarco, acting director of the Federal Housing Finance Agency (FHFA), said the agency’s analysis showed no sure fire financial benefit to letting some mortgage holders reduce their loan amounts. He also warned that such a move could cause some borrowers to default intentionally in hopes of getting taxpayer aid.”We concluded that the potential benefit was too small and uncertain relative to the known and unknown costs and risks,” DeMarco told reporters after a months long agency analysis.DeMarco’s decision came despite prolonged pressure from the Obama administration, Democratic lawmakers on Capitol Hill and housing advocates, who argued that principal reduction is an essential tool in softening the fallout of the housing crash.Treasury Secretary Timothy F. Sacs Goyard Soldes
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