Americans Underwater: Principal Reduction in Policy and Practice

Putting the Issue in Context

Americans Underwater: Principal Reduction as Policy

Americans Underwater: Principal Reduction as Policy

Americans Underwater: Principal Reduction as Policy

Americans Underwater: Principal Reduction as Policy

Americans Underwater: Principal Reduction as Policy

Principal Reduction as Policy

Americans Underwater: Principal Reduction as Policy

Taxpayer Bailout of Reckless Borrowers? “It is absolutely egregious [to] ask people in Tennessee who played by the rules to bail out reckless borrowers in other parts of the country.”

- U.S. Senator Bob Corker (R-TN)

NCRC 2012 Policy Agenda:

Fact or Fiction?Is Principal Reduction A

Taxpayer Bailout of Reckless Borrowers?

Americans Underwater: Principal Reduction as Policy

A Bailout By Another Name? “What the proponents of principal reductions at Fannie and Freddie don’t talk about is what a transfer of wealth from taxpayers (again) to large banks such a program would represent.”

- NY Times Journalist Gretchen Morgenson, March 25, 2012

NCRC 2012 Policy Agenda:

Fact or Fiction?Is Principal Reduction Another Bank Bailout?

Americans Underwater: Principal Reduction as Policy

Forgiving Mortgage Principal Invites Greater Risks?

“Helping people who are behind on their mortgages would ease the foreclosure crisis….Even so, it is a misguided idea….Edward DeMarco, acting director of the Federal Housing Finance Agency… points out that it would reward bad behavior. DeMarco foresees a strong chance that some people who are current on their payments would stop paying to qualify for the government’s generosity.”

- USA Today Editorial Board, April 15, 2012

NCRC 2012 Policy Agenda:

Fact or Fiction?Is Moral Hazard a Valid Defense to Fannie and

Freddie Offering Principal Reduction?

Principal Reduction in Practice

NCRC 2012 Policy Agenda

Questions?