Volume 29 - Number 5
February 3, 2012
Fannie and Freddie May Spurn Enhanced Incentives To Reduce Principal in Latest HAMP Upgrade
A new Treasury announcement sweetens the deal for Fannie Mae and Freddie Mac to allow principal forgiveness in loan modifications, but it’s not clear whether the government-sponsored enterprises, and their regulator, will abandon their opposition to writedowns. New changes in the Home Affordable Modification Program raise the maximum incentives for principal reduction from the current range – 6 percent to 18 percent of the amount forgiven – to a range of 21 percent to 63 percent. The Treasury Department said it would, for the first time, pay these incentives to the GSEs if they agree to write down the...
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