Principal reductions on mortgage loans meaningfully reduce delinquencies and foreclosures, much more than current proposals, according to Fitch Ratings. "I have no doubt about that," Fitch Managing Director Robert Curran said Wednesday in a conference call, although he couldn't quantify his belief with statistics. Curran said the market's ability to originate new loans is hindered by investor worries about the impact principal reduction will have on their profits. "It may in the end — if (principal reductions) were to occur — lead to higher costs of financing for all loans that were employed," Curran said. "To be specific, we've looked at it and we think they would have a meaningful impact on the level of foreclosures." Curran said a political appetite for reductions does not appear to exist. Democrats on the House oversight committee are pushing to subpoena the Federal Housing Finance Agency to obtain an analysis of what principal reductions would have for Fannie Mae and Freddie Mac. FHFA Acting Director Edward DeMarco defends the agency's policy of keeping Fannie and Freddie mortgage servicers from writing down principal, saying such an option would forge more losses for the government-sponsored enterprises. The GSEs owe the Treasury Department roughly $151 billion in bailouts. "While Mr. DeMarco has failed to provide supporting documents demonstrating why a principal reduction program is not in the best interest of taxpayers, economists are increasingly announcing their support for such a program," wrote Reps. Elijah Cummings, D-Md., and John Tierney, D-Mass., in a letter Wednesday asking DeMarco to subpoena the FHFA. Write to Justin T. Hilley. Follow him on Twitter @JustinHilley.