"While principal reduction will give more struggling homeowners a fighting chance at staying in their homes, this is not a matter of charity," said John Griffith, co-author of the report and Policy Analyst at the Center for American Progress. "At its core, principal reduction is good business. A carefully designed principal-reduction program--one that limits long-term risks born by Fannie and Freddie and focuses on borrowers that actually need a reduction--would save the government-sponsored enterprises and the taxpayers supporting them billions of dollars over the life of those loans relative to not doing anything."

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