The Federal Housing Finance Agency’s plan for Fannie Mae and Freddie Mac to begin offering principal reductions to certain borrowers has garnered mixed reviews so far, reports Ben Lane of HousingWire.

Roughly 33,000 borrowers will be eligible to participate in the principal reduction program, which is not as widespread as some thought it might be.

“This plan will no doubt be viewed by some as too small and too late and viewed by others as too large and unnecessary,” FHFA Director Mel Watt said of the plan.

“However, the plan is consistent with FHFA’s statutory obligation to ‘maximize assistance for home owners’ by providing some borrowers what could well be their final opportunity to avoid foreclosure,” Watt continued.

The Mortgage Bankers Association is pleased with the plan, according David Stevens, its president and CEO. “FHFA has a difficult challenge in trying to help underwater homeowners in some of the markets that are still struggling, as they need to balance the moral hazard risk, identify loans that do not add risk to the GSEs or the communities involved, and focus on borrowers that will have the best chance to stay current,” Stevens said.

New York Attorney General Eric Schneiderman said the plan doesn’t go far enough since nearly 60,000 families with mortgages backed by Fannie Mae and Freddie Mac were in default and at risk of foreclosure as recently as 2013.

“The program announced by FHFA today will help roughly half that number nationwide, and the program’s participation requirements will disqualify thousands of New Yorkers in many areas hardest hit by the foreclosure crisis,” Schneiderman said. “I look forward to working with housing experts and advocates in the coming weeks and months to urge the FHFA to build on today’s important announcement and expand this program to benefit all of those who need mortgage debt relief.”

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