Linkage: Are Mortgage Writedowns Smart Or Another Bailout?

Originations links today solely focused on Fannie/Freddie cutting loan balances:

-Fannie & Freddie: Slashing Mortgages Is Good Business (Jesse Eisinger, ProPublica)

-Slashing Mortgages Is A Backdoor Bank Bailout (Gretchen Morgenson, NYT)

And here’s a YahooFinance video/story in which Jesse Eisinger says that principal writedowns, even if they’re good business, are unlikely because FHFA head Edward DeMarco opposes it:

He [DeMarco] is very concerned with moral hazard. It will cause a wave of people wanting this kind of stuff, strategically defaulting … not paying their mortgage so they would get a principal writedown.

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