WASHINGTON – U.S. Sen. Mark R. Warner (D-VA), a member of the Senate Banking Committee, released the following statement on the Federal Housing Finance Agency (FHFA) announcement that Fannie Mae and Freddie Mac will offer principal reduction to certain seriously delinquent, underwater borrowers who are still struggling in the aftermath of the financial crisis to help them avoid foreclosure and stay in their homes.

“While a principal reduction program at FHFA for underwater mortgages is long overdue, I welcome this tailored approach, which will bring essential relief for struggling American families.”

The new Principal Reduction Modification program is a one-time offering for borrowers whose loans are owned or guaranteed by Fannie Mae or Freddie Mac and who meet specific eligibility criteria. The modification will be available to owner-occupant borrowers who are 90 days or more delinquent as of March 1, 2016, whose mortgages have an outstanding unpaid principal balance of $250,000 or less, and whose mark-to-market loan-to-value (MTMLTV) ratios exceed 115 percent.

FHFA expects that approximately 33,000 borrowers will be eligible for a Principal Reduction Modification.

Sen. Warner is a leader in efforts to reform the housing finance system. In 2014, with Sen. Bob Corker (R-TN), Sen. Warner sponsored comprehensive housing finance reform that passed the Banking Committee, 13-9.