From Bloomberg
''Democratic lawmakers have unearthed internal Fannie Mae documents showing the mortgage giant was prepared in 2010 to forgive a portion of troubled borrowers' outstanding loans. Fannie's internal analysis determined the pilot program, which would let Fannie share in any appreciation of the home's value, could prevent foreclosures and save money for U.S. taxpayers. Fannie estimated the program would cost about $1.7 million while providing more than $410 million in benefits.
"Despite the clear conclusion reached by Fannie Mae officials that principal reduction would reduce losses to the taxpayer, this pilot program was prevented from ever getting off the ground," the lawmakers allege in their May 1 letter to DeMarco.
At the same time, James Lockhart -- DeMarco's immediate predecessor at FHFA -- endorsed principal forgiveness as long as it allowed Fannie and Freddie to benefit from price appreciation.''
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