If only they'd closed a little sooner..." After ruminating on the issue for several months, the Federal Housing Finance Agency (FHFA) gave Congress and the Treasury "the Heisman" (think arm outstretched warding off an opponent) and announced that Fannie Mae and Freddie Mac will not lower the amount some homeowners owe on their mortgages. The FHFA said its analysis found that principal reduction does not prevent foreclosures while saving taxpayers money. "FHFA has concluded that the anticipated benefits do not outweigh the costs and risks," said Edward DeMarco, the agency's acting director. Here is the FHFA's letter. Read: Tensions Escalate as DeMarco, Geithner Argue Merits of Principal Reduction But the saga continued with Treasury Secretary Tim Geithner sending, publicly, an eight-page letter to DeMarco urging him to change his mind. In it, Geithner argued that allowing principal reduction would ultimately save taxpayers as much as $1 billion.