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FBN’s Peter Barnes on the potential decision from the FHFA on principle forgiveness for those with underwater mortgages, and how it may impact taxpa...
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The federal regulator overseeing mortgage giants Fannie Mae and Freddie Mac still weighing his decision on debt forgiveness now to plan.
That could help underwater homeowners but cost you the taxpayer Peter Barnes is in Washington the latest Peter.
Blige -- that's right Ed DeMarco suggesting today that Fannie and Freddie may start allowing some debt forgiveness for some struggling homeowners because it might save the company some money.
But at the companies do it it would be on a limited basis for thousands of homeowners not millions and it could still cost taxpayers.
Anticipated benefit of principal forgiveness.
Is that by reducing foreclosures relative to other modification types.
Enterprise losses would be lowered in house prices would stabilize faster.
Thereby producing broader benefits to all market participants.
Now DeMarco is considering letting Fannie Freddie participate for the very first time in a Treasury Department program to reduce mortgage debt it's funded.
By more than twenty billion dollars in taxpayer bailout money left over from that TARP program.
He suggests dead that the program these changes might help 90000.
Deeply underwater homeowners cutting their principal.
By 50000 dollars each that's not chump change which he said would result in losses of one point seven billion dollars less.
To the company's thanks to payments from the treasury.
Then if Fannie and Freddie were simply defer some principal payments for homeowners which is something it does now.
But then again that money would still come from taxpayers.
This looks over -- it meant if we take.
Freddie and Fannie suffer -- losses of treasury bails them out.
Point is is that the total loss to taxpayers is the same issues which shell is or the losses posted under.
Fannie and Freddie were treasury.
And just for some perspective Fannie and Freddie have about 2.5.
Million underwater borrowers and -- Charles is expected to announce its final decision on all this by the end of this month.
Going to be controversial legal way --
