Reduction of mortgage principal on Fannie Mae and Freddie Mac loans would “constitute a direct and sizable gift from taxpayers to the largest banks,” Gretchen Morgenson writes in The New York Times.

The Pulitzer Prize-winning reporter and columnist says homeowners that receive a write-down would be more likely to pay off second liens, many of them held by banks.

Morgenson also touches on the recent cries for Edward DeMarco, head of the Federal Housing Finance Agency, to resign, but writes Fannie and Freddie have led the market in loan modifications since 2010.

It’s a “bizarre” take by Morgenson, writes Felix Salmon of Reuters. In a critical look, he writes Morgenson doesn’t touch on the possibility of negotitating with second lienholders and that most Fannie and Freddie mortgages don’t have them anyway.

Read more at The New York Times.