Many experts say reducing mortgage principal can help troubled homeowners avoid foreclosure and stay in their homes. But the regulator who oversees two of the nation's largest mortgage holders, Fannie Mae and Freddie Mac, has rejected the idea. Justin Sullivan/Getty Images hide caption

itoggle caption Justin Sullivan/Getty Images

For sale signs on a foreclosed house in Glendale, Calif., last September. Kevork Djansezian/Getty Images hide caption

itoggle caption Kevork Djansezian/Getty Images