Less Taxpayer Money for Fannie & Freddie

Saying Fannie Mae and Freddie Mac have already cost taxpayers more than $188 billion, the acting chief of the Federal Housing Finance Agency, which regulates those lenders, says he has concluded that those firms won't participate in the Obama administration's program to cut the amount struggling homeowners owe.

Edward DeMarco, the acting chief of the FHFA, said in a letter to the Senate Banking Committee that he's given the matter a lot of thought, but that the principal reduction part of the Home Affordable Modification Program "would not make a meaningful improvement in reducing foreclosures in a cost-effective way for taxpayers."

U.S. Treasury Secretary Timothy Geithner has already responded to express his disapproval of DeMarco's decision.

“I am concerned by your continued opposition to allowing Fannie Mae and Freddie Mac to use targeted principal reduction in their loan modification programs,” he wrote, according to MarketWatch. He argues that participating in the program could lead to help for 500,000 homeowners and save Fannie and Freddie $3.6 billion when compared to other loan-modification programs.

Read more here. http://consumerist.com/2012/07/fhfa-says-no-to-cutting-amount-homeowners-owe-on-fannie-mae-freddie-mac-mortgages.html