Principal reduction is an “important tool” in the effort to repair damage from the U.S. housing crisis, a U.S. Treasury official said.
“In some targeted cases, principal reduction makes economic sense for both the homeowner and the lender -- helping reduce investor losses and preventable foreclosures over the long term,” Mary Miller, the Treasury’s undersecretary for domestic finance, said in remarks prepared for a speech in Washington today.
Miller said the housing market “remains weak, although it has begun to show some signs of stabilization.”
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