Mortgage Write-Down Plan Rejected

The Federal Housing Finance Agency, the independent federal agency that administers Fannie Mae and Freddie Mac, issued another blow to Democrats and the Obama administration Tuesday, once again rebuffing the request to let the mortgage finance companies offer debt forgiveness to struggling homeowners. Though debt forgiveness could have helped upwards of half a million homeowners, “the anticipated benefits do not outweigh the costs and risks,” says FHFA head Edward DeMarco. The projected improvement in reducing foreclosures would not be enough to justify the cost to taxpayers, who hold much of the financial burden if the program was implemented, he says.