Freddie and Fannie underwater purchase proposal meets resistance
12/17/2010
By Credit.com Staff
The Federal Housing Finance Agency, the governmental body that regulates both Fannie and Freddie, has expressed concern that enacting the underwater mortgage repurchasing plan will cost both home loan giants even more money than they already have, according to a report in the Washington Post. Further, it says that buying back 10 percent or more of a creditworthy consumer's home loan treads on questionable moral ground.
Similarly, U.S. Representative Randy Neugebauer says that the program could be troublesome both because it "targets performing loans" and that writing down loan principals may not be in the best interest of the American taxpayers, the report said.
Millions of Americans have been faced with underwater home loans in recent years as property values have continued to sink. Some experts say that despite this trend, the housing market may still decline further.
