Melvin L. Watt, the director of the Federal Housing Finance Agency, is nearing a decision over whether to allow struggling home borrowers in the U.S. to reduce their mortgage balances, an issue that has dogged the regulator since the end of the housing crisis, Bloomberg News reported yesterday. An announcement from the FHFA, which oversees mortgage giants Fannie Mae and Freddie Mac, is expected to come in the next 30 days, Watt said. Any policy will require a “win-win” strategy for eligible borrowers and for the taxpayer-backed enterprises, he said, noting that it’s still possible they take the option “off the table entirely.” Watt, who was appointed to the FHFA by President Barack Obama at the behest of borrower and affordable-housing advocates, has been enmeshed in the same debate that followed his predecessor, Edward J. DeMarco. DeMarco resisted the idea of debt reductions on grounds that they would cost taxpayers.
