Obama 2nd Term May See Huge Expansion of Mortgage Relief Via Fannie, Freddie

Now that his re-election is behind him, President Obama may take care of some unfinished business on the housing-market front that could affect millions of “underwater” borrowers whose mortgages exceed the value of their homes.
Speculation is high that Obama will replace embattled Edward J. DeMarco, the acting director of the Federal Housing Finance Agency (FHFA), the independent regulator over Fannie Mae and Freddie Mac.
Four months ago, DeMarco rebuffed efforts by Obama to initiate principal forgiveness for “underwater” mortgage holders. DeMarco announced  that “anticipated benefits do not outweigh the costs and risks” of mortgage write-downs.
The potential cost to taxpayers – and concerns that borrowers would stop making payments to secure debt forgiveness – were among the factors cited by DeMarco. Fannie and Freddie, which own more than 60 percent of U.S. mortgages, has received more than $160 billion in government bailouts since 2008. DeMarco said he was acting to protect the taxpayers from having to foot a huge amount in addition mortgage write-offs.
But the president and democrats want relief for millions who cannot secure mortgage relief for their “underwater” home loans.
The cost of such a massive mortgage write-off to help a huge segment of homeowners could start at $100 billion.

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