Ed DeMarco, the Acting Director of the Federal Housing Finance Agency for the past three years, will deliver a speech today at the Brookings Institution that leans in the direction of allowing principal reduction on Fannie and Freddie-backed loans in certain cases. This is definitely a crack in the otherwise rigid objection to principal reduction on these loans, but his preliminary analysis suggests the idea may not produce that great an effect.

At a press event in North Portland in front of the home of a family struggling to avoid foreclosure, Senator Jeff Merkley unveiled a six-part plan to fix the housing market and rebalance the relationship between borrower and lender. The plan includes what Merkley calls “lifeline bankruptcy,” which is basically the cramdown proposal to allow bankruptcy judges to modify the terms of primary residence loans.