DeMarco Outlines Justification against GSE Principal Reduction

``DeMarco's rationale relies on an internal analysis provided to him in December 2010 and updated in June 2011 which shows that the use of principal reduction as a loss mitigation measure for GSE loans under with the Making Home Affordable (HAMP) program or the FHA Short Refi program would cost the Enterprises more than the benefits derived and recommended that, instead the GSEs should more aggressively pursue propriety loan modifications that reduce the interest rate, extend the mortgage term, and provide for substantial principal forbearance and promote HARP refinance transactions for borrowers who are current on their mortgages but underwater in respect to their equity. '' -- This seems more than a little geared towards making FHFA (the GSEs) look good...