In the wake of numerous government agencies and industry experts weighing in on the effects of principal mortgage reductions, Federal Reserve chairman Ben Bernanke stated that the measure could be helpful to borrowers if properly structured.

Bernanke's statement comes after the Federal Housing Finance Agency released a white paper claiming that principal reductions on loans held by government-sponsored enterprises Fannie Mae and Freddie Mac would cost taxpayers an addition $100 billion due to a loss in profit from the companies.

"I have spoken about this in the past and it certainly has some advantages," said Bernanke. "A lot depends on how it's structured and what the alternatives are that you're considering."

The Fed issued a report examining principal reductions and the effect they would have on the mortgage industry earlier in January. However, the report was intended to simply examine the pros and cons of the measure rather than establish the opinion of the agency.

"I think it's important to say that our intent in that white paper was to provide the benefit of our analysis to the public, and to those who will be making policy," Bernanke said. "There are a variety of views about principal forgiveness in the Federal Reserve system and there's no official position."

However, members of Congress share a similar sentiment toward principal reductions. While some believe that the government should refrain from further expanding it's influence in the housing market, other feel the measure could be a significant help to many homeowners who are currently underwater in finding more closing solutions for refinancing.

Meanwhile, the FHFA report on principal reductions, which claimed they would result in significant losses to Fannie and Freddie, posited that principal forbearance would be a much more effective measure in assisting distressed borrowers. Principal forbearance would reduce monthly home loan payments for households rather than reduce the total amount left on the loan. 

"Given that any money spent on this endeavor would ultimately come from taxpayers and given that our analysis does not indicate a preservation of assets for Fannie Mae and Freddie Mac substantial enough to offset costs, an expenditure of this nature at this time would, in my judgment, require congressional action," said FHFA acting director Edward DeMarco.

The Federal Reserve, FHFA and other government agencies are expected to continue weighing the options surrounding principal reduction in pursuit of regulations that would help struggling homeowners.