(Blooomberg) -- Treasury Secretary Timothy F. Geithner said two to three years of “aggressive, creative”programs are needed to help the U.S. recover from its housing crisis.
“We’re going to keep at this as long as necessary,”Geithner said at an event in Los Angeles today. “We think there’s a very good case for people deeply under water, experiencing hardship, to modify their mortgages by reducing principal.”
Government-sponsored enterprises Fannie Mae and Freddie Mac won’t forgive principal on delinquent mortgages they guarantee, the firms’ regulator said today. Months of analysis showed there would be no clear benefit to taxpayers if the Federal Housing Finance Agency were to change its policy barring the mortgage-finance companies from loan modifications that include debt writedowns, Edward J. DeMarco, the agency’s acting director, told reporters.
Geithner criticized the decision in a letter to DeMarco today. “I do not believe it is the best decision for the country,” Geithner wrote. “The use of targeted principal reductions by the GSEs would provide much-needed help to a significant number of troubled homeowners.”
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