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The federal regulator who oversees Fannie Mae and Freddie Mac is softening his position against allowing the mortgage giants to reduce principal for U.S. borrowers at risk of foreclosure.
Government-controlled mortgage buyers Fannie Mae and Freddie Mac may reduce taxpayer risk by requiring more mortgage insurance from borrowers and charging lenders higher fees, steps that could increase borrowing costs, the head of their government caretaker agency said Monday.
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And fewer than 1 million homeowners would be eligible for principal reductions — a fraction of the estimated 11 million Americans who owe more on their mortgages than their homes are worth, he added.
he noted that mortgage-principal reductions would lower Fannie and Freddie losses and help stabilize home prices faster.