The Federal Housing Finance Agency (FHFA) late Tuesday revealed that it gave Fannie Mae the green light to conduct a pilot program with Wells Fargo in March 2010 to test principal reduction modifications.

The agency, in a newly disclosed letter to Congress, revealed the approval, after Reps. Elijah Cummings, D-Md., and John Tierney, D-Mass., discovered that Fannie developed a similar pilot program with Citibank, which FHFA acting director Edward DeMarco had not disclosed to the lawmakers.

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