Rep. Elijah Cummings, D-Md., pressed Treasury Secretary Timothy Geithner at a House subcommittee hearing Wednesday on the possibility of offering Fannie Mae and Freddie Mac principal write-downs.
Geithner told Cummings there are certain instances that make a strong economic case for principal reduction as part of a strategy to limit future losses to the government-sponsored enterprises. He did not go into specifics.
Edward DeMarco, the director of the Federal Housing Finance Agency, is a vocal opponent of GSE write-downs.
“We have been having discussions with (DeMarco) about how to narrow the differences between us. But he will have to make these choices,” Geithner told Cummings.
“Maybe on this question it will be better for me to come back and talk to you in more detail about it separately,” Geithner added. “Maybe in a couple of weeks we could give you a better sense about where he is going to come out.”
— Justin T. Hilley
