Treasury’s Miller Says Principal Reduction an Important Tool

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.”

To contact the reporter on this story: Ian Katz in Washington at ikatz2@bloomberg.net

To contact the editor responsible for this story: Chris Wellisz at cwellisz@bloomberg.net