Neil Barofsky, special inspector general for the Troubled Asset Relief Program, said the White House should consider requiring banks to reduce mortgage principal for "underwater" homeowners. The Obama administration recently expanded its efforts to help struggling homeowners, but the initiatives, including the Home Affordable Modification Program, are voluntary. "Giving [mortgage] servicers the discretion to implement principal reduction introduces a questionable inconsistency into the HAMP program and stands in stark contrast to the mandatory nature of the other significant mortgage modification triggers," Mr. Barofsky wrote.

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