February 10, 2012Statement by Kelli Parsons, Senior Vice President and Chief Communications Officer, on Recent Media Coverage of Principal Reduction Pilot Programs
"In response to the unprecedented housing crisis, Fannie Mae has considered a number of small scale test pilot initiatives designed to learn more about borrower behavior and whether the benefits of principal reduction alternatives outweigh the associated costs and risks. Our initiatives have been based on a careful analysis of effectiveness and cost, not on ideology.
We have found that there are a number of challenges with principal reduction efforts, including significant technological and systems complexity and substantial cost without proven effectiveness. The conclusion was that the size of the borrower's monthly payment is what matters most and that forbearance is a more cost effective way to reduce a borrower's monthly payment.
We continue to consider options to prevent foreclosures in a way that appropriately balances the costs to taxpayers with the results for borrowers. Since 2009, Fannie Mae has helped nearly one million borrowers work out their loans. We will continue to work to prevent foreclosure whenever possible."