2012-05-01mortgagenewsdaily.com

Representatives Elijah Cummings and John F. Tierney say they have obtained a "wide range of internal documents" from Fannie Mae that contradict DeMarco's congressional testimony on the matter.

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In a letter to DeMarco the two said, "Contrary to your testimony, we have now obtained a wide range of internal documents demonstrating that Fannie Mae officials conducted detailed, substantive analyses and concluded years ago that principal reduction programs have enormous potential to save U.S. taxpayers significant amounts of money by reducing overall losses from foreclosures following default."

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DeMarco noted that, since 2009, FHFA has approved multiple pilot programs to look into various alternatives to principal forgiveness and that such approvals should refute any claim of a pre-determined view on his part as should the fact that FHFA continues to consider principal forgiveness alternatives including recent changes to the HAMP program initiated by the Treasury Department. He described the pilot programs as reflecting an open and robust interest in this topic, enthusiasm for meeting the goals of finding a workable approach...and adherence to review of ideas from all sides.' Pilot programs by their nature are experimental, he said, and go through discussion and review prior to deployment and then must be reviewed prior to any full implementation of a broad program. "At the corporate level, taking into account staff perspectives and experience, the pilots were not pursued or were terminated." He said that operational concerns were a key determining factor in not pursuing or ending the pilot programs.


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