Coffee Sipping Big Board Stocks

[Tuff-Stuff]

Talk About BS>Fannie docs: Cuts to mortgages would help taxpayer
Fannie papers refute FHFA stance on cuts to loan principal: letter

— Officials at Fannie Mae concluded that a key housing initiative being rejected by the government-seized housing giant’s regulator would save taxpayer’s money, according to a letter released by a top Democrat Tuesday.

Rep. Elijah Cummings, the top Democrat on the House Committee on Oversight and Government Reform, provided a summary of internal Fannie Mae documents he obtained asserting that officials at the mortgage firm concluded in an analysis that cutting the amount underwater borrowers owe on mortgages owned by the government-seized housing giant could save taxpayer money.

Roughly 11 million homeowners are underwater, which is when borrowers owe more than their homes are worth.

The letter comes after the chief of the regulator for Fannie Mae and Freddie Mac, Ed DeMarco, has defended his policy of not cutting the principal owed by borrowers — known as principal forgiveness — for mortgages owned by the two mortgage companies in recent months, including in testimony to Congress in November.

Roughly 56% of all U.S. mortgages are owned or guaranteed by Fannie and Freddie.

DeMarco recently said he’s willing to consider having Fannie and Freddie participate in a recently expanded Obama administration principal reduction program, though he's pointed out the drawbacks to doing so, including an estimated $2.1 billion cost to taxpayers. <<<<<<<<<<<

full http://www.marketwatch.com/story/fannie-docs-cuts-to-mortgages-would-help-taxpayer-2012-05-01