Speaking at an event at the Brookings Institution, Addressing the Weak Housing Market: Is Principal Reduction the Answer?, FHFA Acting Director Ed DeMarco, previously resitant to the idea of principal reductions, said there could be a savings of up to $1.7 billion for Fannie Mae and Freddie Mac under an expanded HAMP.
DeMarco's statements come following an appearance last Wednesday at the Boston Security Analysts Society, where he said FHFA would make a decision on principal writedowns sometime in April.
But today, following a growing chorus of criticism calling on the FHFA chief use principal reduction as a tool to keep to underwater homeowners in their homes, DeMarco seemed warmer to the idea, but stopped short of offering a full-throated endorsement.
“This is not about some huge difference-making program that will rescue the housing market, it is a debate about which tools, at the margin, better balance two goals: maximizing assistance to several hundred thousand homeowners while minimizing further cost to all other homeowners and taxpayers.”
Read DeMarco's prepared remarks here.