United States Department of the Treasury - Should the Federal Government assist mortgage defaulters?

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United States Department of the Treasury The Federal Government should assist mortgage defaulters. Plan to allow borrowers refinance with government-backed loans.

Evidence approved (3/20/2008 3:03:32 PM)

Plan to allow borrowers refinance with government-backed loans.

From AP:

The federal Office of Thrift Supervision, a division of the Treasury Department, is drafting a plan to help borrowers who owe more on their mortgages than their homes are worth.

The plan would allow an estimated 8 million homeowners with "upside-down" mortgages to refinance into government-backed loans covering the home's current value. To make up the difference, lenders would receive a special certificate equivalent to the remainder of the balance owed that they could redeem if the home were eventually sold at a higher price.