Forgiveness of Debt Could Yield Savings
As the regulator for Fannie Mae and Freddie Mac nears its decision on whether to approve debt forgiveness for troubled borrowers, a new analysis by the regulator suggests taxpayers could benefit from the move, according to people briefed on the findings.
Fannie and Freddie could save about $3.6 billion more than current loss-mitigation approaches by reducing balances for some borrowers who owe much more than their homes are worth, these people said.
The Federal Housing Finance Agency is nearing a decision on whether to allow the companies to participate in the debt-forgiveness program that it consistently has resisted.Until now, the Federal Housing Finance Agency has maintained that the current housing-rescue programs offered by the taxpayer-supported mortgage companies are less-expensive options.
The new analysis was done because the Treasury Department said in January it would pick up part of the tab if the companies would reduce principal balances when modifying mortgages for troubled borrowers. It would use unspent housing funds from the $700 billion Troubled Asset Relief Program.
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Debt forgiveness, in terms of whether it will help or harm taxpayers is yet another false dichotomy brought to you by our corrupt public officials. They’ve done everything they can to protect Banksters all the way to the U.S. Justice Department. Most of the Government is only concerned with immunizing the criminals from prison time, and then fine their companies to preserve the illusion of justice. That aside, these facts fly right into morally hazardous faces of Wall Street’s Treasury Department. Incidentally, it is they that are in debt to us.