New York Attorney General pushes FHFA for principal reduction

It turns out that the housing rights protestors that interrupted a lecture earlier this week at Harvard from Federal Housing Finance Agency Director Mel Watt aren’t the only ones pushing the FHFA to engage in principal reduction.

In a letter sent this week to Watt, New York Attorney General Eric Schneiderman joins the chorus calling for Fannie Mae and Freddie Mac to reduce the mortgage balances of struggling borrowers.

In Schneiderman’s letter, a copy of which was obtained by HousingWire, New York’s attorney general says that he is “pleased” that the FHFA is now “seriously evaluating” adopting a principal reduction plan, and advocates that principal reduction “should be deployed broadly and quickly to homeowners in desperate need of this relief from the continuing damage caused by the housing crisis.”

According to Watt, the FHFA is still considering a principal reduction plan, despite reports to the contrary.

Read on.

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