mr. dimarco should be doing principal reductions now but has refused. secretary geithner, i know you are in negotiations with mr. dimarco and the treasury has now offered triple incentives for principal reductions. can you tell us why treasury is doing that and why are these inseptemberatives important? >> well, as you point out that under the law, the treasury and the administration do not have any authority to compel account fhfa to undertake specific activities and under the conservatorship mandate they have to make sure they meet a very tough test appropriately so to make sure the things they're doing are in the interests of reducing losses to the taxpayer, maximizing overall returns to the taxpayer. but there are certain cases where we think there's a pretty strong economic case for principal reduction as part of a strategy to limit the future losses to the gses. so we've been having some discussions with him about how to narrow the differences between us. but he'll have to make these choices. i think maybe on this question, it would be better for

mr. dimarco, was that a concern of yours? particularly when we have tripled the incentives for those kinds of things. just curious. >> as i said, there's a very strong economic case in some circumstances. and that's why you're seeing private investors do it to reduce principle for people under water but can afford to stay in their home with a reasonable payment, and that case will be equally compelling in parts of the people whose loans were guaranteed by fannie and freddie. what we're trying to do is encourage mr. dimarco who is fully independent -- >> i understand that. >> to take another look at the evidence, because we think there's a place for doing more in a way that's completely consistent with a mandate that congress gave him appropriately or make sure he's protecting the interests of the taxpayer as he helps the housing market. we're working through those numbers with him, and i expect to hear more from him in the next couple weeks. >> on the behalf of the many, many, the millions of americans who are dealing with th

mr. dimarco has worked with us on a number of issues. like forbearance, allowing people to delay payments of mortgages until they get out of a situation where they might be unemployed but we have not attempted -- we have not succeeded in helping as many homeowners as we we realreally . >> wish you the best of luck trying to help struggling homeowners. >> chuck todd, thank you as well. we'll see you on "the daily rundown." >> chuck, you're a troublemaker today. be careful. off camera. be careful. sometimes that bleeds on camera. >> those birds don't fly. >> who is your pick for the tournament? >> i'm still sticking with unc but it's tough. >> marshall, articlington, went high school here in arlington, virginia. exciting to see marshall do so well. >> andrea, do you have a pick? >> i still think kentucky. >> michael? >> kentucky. >> he doesn't even ask me. up next it's "morning joe" football frenzy with roger. we'll be right back. i'm jennifer hudson and i believe. i was strong before weight watchers, but i'm stronger with it. i believe be

mr. dimarco should be doing principal reductions now, but he has refused.t you are in negotiations with mr. dimarco and the treasury has now offered triple incentives for principal reductions. can you tell us why treasury is doing that and why are these incentives important? >> well, i should point out that under the law, the treasury and the administration did not have any authority to compel the fhfa to undertake specific activities. under the conservatorship mandate, they have to make sure they meet a very tough test, appropriately so, to make sure the things they are doing are in the interest of row deureducing losses to the taxpayer. there are situations where we think there's a strong economic case for principal reduction as part of a strategy to limit the future losses to the gses so we've been having some discussions with him about how to narrow the differences between us. but he'll have to make these choices. and i think maybe on this question, it would be better for me to come back and talk to you in more detail about it separately. maybe in a cou

mr. dimarco has done, but is the minute administrations reaction if he fails to adopt some of your provisions because he believes that it has terminus costs to the taxpayers? >> we have actually been working very closely with mr. demarco. he has been put in a tough job, as he said. he has been overwhelmingly supportive as we are opposed to repair the damage in the housing market. there are some areas where we disagree, of course, under the conservative mandate congress designed for the fha administration, secretary has no authority over the choices he makes in this area. but where we believe the interest of the taxpayer and router housing market are best served by a additional initiatives, we are going to continue to adopt those as we quite successfully have for the last three years. on the issue of principal reduction, there is a very strong economic case to provide the principal reduction in some circumstances where people are deeply underwater and face a hardship like a loss of job. that is why you are seeing things and investors across the market on a much larger scale in those areas. >>