The Obama administration is ratcheting up the pressure on the Federal Housing Finance Agency (FHFA) to write down mortgage debt.
Shaun Donovan, secretary of the U.S. Department of Housing and Urban Development, used an interview broadcast yesterday on C-SPAN to repeat the administration's efforts to get the FHFA to reverse its refusal to begin a principal reduction program.
‘This isn't about force,’ said Donovan. ‘This is about making the right decision for homeowners and for the taxpayers.’
FHFA Acting Director Edward DeMarco has resisted principal reductions, stating they would increase the costs of running Fannie Mae and Freddie Mac. His actions have been the subject of criticism from several prominent congressional Democrats, and several progressive political advocacy groups have called for the president to fire him.
However, in a speech delivered last week before the Boston Security Analysts Society, DeMarco stated that he was considering a shift in policy based on changes made by the U.S. Department of the Treasury to the Home Affordable Modification Program. DeMarco said that he would make a final decision on the matter later this month.
For his part, Donovan offered no clue on how the administration would react if DeMarco would not change his current policies. ‘We'll have to look at that analysis and understand what his concerns are,’ Donovan said.
