WASHINGTON – The Federal Housing Finance Agency will announce within the next 30 days whether it will endorse a principal reduction strategy for the government-sponsored enterprises, or take "principal reduction off the table entirely," FHFA Director Mel Watt said in remarks Tuesday.

Watt's comments, before the Women in Housing and Finance group here, signal the agency may finally be reaching resolution on whether Fannie Mae and Freddie Mac will allow principal reductions. The question has not only dogged Watt's relatively short tenure but has been a point of contention about how to improve loss mitigation since after the 2008 financial crisis.

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