Fannie and Freddie hinder principal-reduction programs

Arizona is trying to help its underwater homeowners through a principal-reduction program but has made little progress largely because Fannie Mae and Freddie Mac refuse to participate in the effort. "It is extremely difficult for the principal-reduction program to be successful" when Fannie Mae and Freddie Mac won't participate, said Shaun Rieve, spokesman for the Arizona Department of Housing.

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