Feds’ help for struggling homeowners ‘too little, too late’

Nearly a decade after the housing bubble burst, the federal government is still trying to find ways to help homeowners struggling with too much debt. But its latest idea—to slash those loans to manageable levels—has left some housing advocates wondering why it took so long.

In mid-April, the Federal Housing Finance Agency said that for the first time since the crash, it would allow cuts in the amount of principal languishing homeowners owe on their mortgages backed by Fannie Mae and Freddie Mac. The two agencies, which back the majority of U.S. home loans, are regulated by the FHFA. Up until then, federal mortgage-rescue programs had only allowed cuts in borrowers’ interest rate.

“It’s too little, too late,” said Spencer Cowan, senior vice president of research at the Woodstock Institute, a Chicago-based nonprofit…Please click here to read Dennis Rodkin’s story in Crain’s Chicago Business.