April 18, 2016

Senator Warren’s Statement on FHFA’s Principal Reduction Announcement

Washington, DC– United States Senator Elizabeth Warren issued the following statement today about the Federal Housing Finance Agency’s (FHFA’s) recent announcement that principal reductions will be made available for certain homeowners: 

"While this program will help a small number of underwater homeowners, last week's announcement was a bitter pill to swallow for the millions of homeowners who could have benefitted from a much broader program years ago.  As part of the 2008 bill authorizing the Treasury to spend billions of dollars to bail out the Too Big to Fail bank, Congress also directed FHFA to ‘maximize assistance' to homeowners, including through a mortgage principal reduction program.  The big banks got their money immediately - but, for eight years, homeowners never got their principal reduction program, even though studies showed that such a program could have helped a large number of homeowners and saved Fannie and Freddie billions of dollars.  FHFA's refusal to act sooner represents a failure of leadership by both Director Watt and his predecessor."