"The FHFA director unilaterally decides on guarantees and other fees, underwriting standards, rules relating to loan repurchase requests, rules for loan modifications including principal write-downs," Axel wrote, saying that replacing DeMarco "could be a major game changer".
The banks would take a hit on principal write-downs.
"So principal write-downs could lower homeownership going forward," he said.
The companies themselves have studied principal write-downs and the effects they would have on taxpayers.
Compelling the banks to do principal write-downs is an undeniable accomplishment of the settlement.
Democrats on Capitol Hill have slammed Mr. DeMarco while calling for principal write-downs.
Research by the Congressional Budget Office confirms that principal write-downs would save the government money and reduce foreclosure and delinquency rates.
As such, principal write-downs are another backdoor bailout for the banks that brought you the mortgage crisis.
Mr. Brinkman added that he had seen little evidence that lenders were reconsidering their stance against principal write-downs.
What is needed is a set of policies — rentals, forbearance, principal write-downs and refinancings — on a scale that tackles the problem.
