The Federal Housing Finance Agency (FHFA) will decide sometime in April whether the higher incentive fees the Treasury Department is paying are enough to justify allowing Fannie Mae and Freddie Mac to do principal reductions for the first time.

FHFA acting director Edward DeMarco has resisted pressure from the Obama administration over the past year to allow GSE servicers to do loan modifications that feature principal reductions. In January, the Treasury hiked the incentive fees for principal reductions to cover up to 63% of the costs.

Subscribe Now

Access to a full range of industry content, analysis and expert commentary.

30-Day Free Trial

No credit card required. Access coverage of the securitization marketplace, including breaking news updated throughout the day.