FHFA Director Watt: Expect Decision on Principal Reduction within 30 Days

In remarks delivered at a luncheon sponsored by Women in Housing and Finance last week, FHFA Director Mel Watt acknowledged that the “FHFA has received substantial criticism, both before and since I became the Director” for not allowing the GSEs to offer principal reduction as a part of their loss mitigation strategy.  However, Watt was quick to point out that the FHFA staff has been “methodically studying” the issue since he became Director two years ago seeking a “win-win” strategy – one that “would benefit both borrowers and the Enterprises” and that he “expect[s] to announce a decision within the next 30 days about whether we have been able to find a ‘win-win’ principal reduction strategy or whether, on the other hand, we will take principal reduction off the table entirely.”  He added: “stay tuned for more on this in the near future.”

The complete text of Watt’s prepared remarks are available at:

http://www.fhfa.gov/Media/PublicAffairs/Pages/Mel-Watt-Prepared-Remarks-WHF-Public-Policy-Luncheon-3-22-16.aspx

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