Washington Post (02/21/08) P. D1; ElBoghdady, Dina
A plan proposed by the Office of Thrift Supervision to minimize foreclosures would target borrowers who owe more than their dwellings are worth due to recent home-price declines that make it impossible for them to refinance their mortgages. Under the proposal, borrowers would refinance into an FHA-insured mortgage for the current value of the home; and the leftover amount would be given to lenders in the form of a "negative equity certificate." The certificate would allow lenders to collect if the home is eventually sold for more than the amount of the mortgage; otherwise, they would be forced to assume the loss. The certificates will be traded for an estimated $2 for every $100 in home value--rising along with the housing market--to offset some of the risks, says Stanford Policy Research analyst Jaret Seiberg. The plan has not received the support of the Bush administration or Congress; and while it offers investors a better deal than foreclosure, it remains to be seen how well it will be received.
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment