Edward DeMarco Threatens Action Against Communities Weighing Principal Reduction Proposal

On Thursday, the Federal Housing Finance Agency, which DeMarco oversees as acting director, threatened to take action against local governments considering using the power of eminent domain to write down the value of some underwater mortgages in their communities. The move comes a week after DeMarco ruled out principal reduction on loans controlled by Fannie Mae and Freddie Mac, the bailed-out mortgage giants he effectively controls as conservator of the companies.