By Joe Light | The Wall Street Journal
Pretty much ever since he took the helm in January 2014, Federal Housing Finance Agency Director Melvin Watt has been under pressure from housing advocates and some lawmakers to allow mortgage-finance giants Fannie Mae FNMA -1.22% and Freddie Mac FMCC -0.85% to reduce the mortgage principal on at least some home loans.
Even though the housing recovery has been a balm to many homeowners, thousands of homeowners, especially in working-class communities, still owe more than their homes are worth. The large volume of “underwater” homes has led the advocates to urge Watt and others within the government to provide help.
Here’s a breakdown of the issue and what, if anything, the government might do.
