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C minutes are right right now we do have some breaking news though -- Federal housing finance agencies principal reduction program here we -- -- another housing program rich ads in in -- with the details favorites.
Well tragedy a bond illustration wants principal forgiveness for underwater Fannie and Freddie mortgages their regulator just said no in a letter to congress.
Acting FHFA director Ed DeMarco Wright's principal writedowns could benefit Fannie and Freddie between a 10500 million dollars however.
He writes nearly all of this benefit is simply a transfer from taxpayers to the enterprises.
Which would add to -- over 188.
Billion dollars in taxpayer support.
The enterprises have already received under other reasonable assumptions implementing this program.
Would actually increase taxpayer costs in an immediate response Treasury Secretary Tim Geithner writes.
I recognize that you have these -- legal authority to make this decision however.
I do not believe it is the best decision for the country.
Geithner argues writedowns could save the GS he's billions of dollars though DeMarco.
Also says he's concerned about the market effects of changing the terms of a contract in this case of mortgage.
He also says there are moral hazard issues that federal writedowns could give current borrowers a message -- the government endorses forgiving mortgage debt.
If a borrower can prove they cannot pay basically creating a -- incentive is he puts it for borrowers to become eligible for government help.
Tracy back to you -- united talked about this over and over again I completely agree with DeMarco excellent stuff brits at since and.