By Patrick Rucker
WASHINGTON (Reuters) - A sweeping write-down of mortgage loans in weak housing markets is not the right medicine for today's ailing U.S. homes sector, the chief executive of Fannie Mae (FNM.N: Quote, Profile, Research, Stock Buzz) said on Wednesday.
Some lawmakers and consumer groups have said that many home markets are so badly damaged that stability will only be restored once mortgage lenders and servicers rewrite the loans to the new property value.
Daniel Mudd, who runs the nation's largest source of mortgage financing, said such a sweeping move is not necessary to shake the nation out of its housing funk because the market has strong economic and demographic underpinnings.
"It is a timing issue as much as a value issue. In time, if you look at the raw demographics of the housing market, there are more buyers than there are houses. There are more families formed than there are available affordable homes," he said on a conference call to the Reuters Housing Summit in New York. "The question is how much of a decline do you get before home values go up?"
An array of programs from lenders and servicers rather than a sweeping loan rewrite initiative is likely to be the best fix for the market, Mudd said.
"I think the solution is going to come from hundreds if not thousands of parts," he said.
(For summit blog: summitnotebook.reuters.com/)
(Reporting by Patrick Rucker; editing by Phil Berlowitz)
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