WASHINGTON, July 31 The top U.S. housing
regulator rebuffed the offer of taxpayer funds to reduce
mortgages held by struggling homeowners on Tuesday, a blow to
the Obama administration which is keen to show voters it can
help fix the housing market.
Calling it a challenging decision, the regulator for Fannie
Mae and Freddie Mac said using funds from the Troubled Asset
Relief Program would not make a meaningful improvement in
reducing foreclosures in a cost-effective way for taxpayers.
"The anticipated benefits do not outweigh the costs and
risks," the Federal Housing Finance Agency's head Edward DeMarco
The administration has been pressuring DeMarco to allow the
government-controlled mortgage financers to do more principal
writedowns. But DeMarco has maintained that this would
needlessly drive up the costs of their taxpayer bailout, which
has already reached more than $150 billion.
Treasury Secretary Timothy Geithner told DeMarco in a letter
released to media he was concerned about the regulator's
continued opposition and urged the acting director to reconsider