FREDDIE AND FANNIE WON'T PAY DOWN YOUR MORTGAGE.

Pressure is mounting on loan servicers and investors to reduce troubled homeowners' loan balances... but the two largest owners of mortgages aren't getting the message. 

Looking for a loan modification - hoping to reduce your principle?  Not if your loan is a Freddie or Fannie Mae. 

But their stance is out of line with the Obama administration - which is seeking to expand the use of principle writedowns. 

Fannie Mae and Freddie Mac are controlled by the federal government, do not lower the principle, instead they are opting for interest rate reductions and term extensions when modifying loans.

Housing experts, however say it's time for Fannie and Freddie to start reducing principle. The treasury have already set aside $75 billion for foreclosure prevention, which can be spent on interest-rate reductions or principle write downs. 

Meanwhile, a growing number of loans backed by Fannie and Freddie are falling into default, so advocates argue, lowering loan balances now can actually save the companies and taxpayers money later! 

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