If Mel Watt is confirmed to take over as executive director of the Federal Housing Finance Agency, he will reportedly take a stance that supports President Obama's decision to lower loan balances. A Congressional report said 27% of HAMP modifications have redefaulted, which amounts to 184,000 HAMP mods that have gone through TARP and not the government-sponsored enterprises, redefaulting at a cost of $972 million in incentives paid with tax dollars. The redefault rate was at nearly 50%. So if Mel Watt is confirmed and the GSEs take on a new strategy to reduce principal balances, is it the solution we are looking for?
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