Regulator says no to Obama mortgage write-down plan
The regulator for government-run housing finance giants Fannie Mae and Freddie Mac said on Tuesday that using taxpayer-funded bank bailout money could encourage defaults and not make a big improvement in reducing foreclosures in a cost-effective way for taxpayers.
“The anticipated benefits do not outweigh the costs and risks,” said the Federal Housing Finance Agency’s head Edward DeMarco, who has come under intense pressure from the government to agree to the plan.
The regulator’s decision drew an immediate rebuke from the Obama administration and Democratic lawmakers. Treasury Secretary Timothy Geithner disputed the agency’s conclusions and urged DeMarco to reconsider his decision.
Let’s hope he can keep the agency from giving away more free money.