Wall Street Journal (03/28/08) P. A6; Paletta, Damian
A proposal from HUD would allow FHA to insure a portion of mortgages whose balances exceed the home's worth in an effort to curtail foreclosures. The plan would be smaller than the one currently under consideration by Congress, which would permit the agency to insure another $400 billion in mortgages after lenders write-down the loans so that they can be refinanced. "We will insure 80 to 85 percent of the loan--give ourselves some leeway even if it falls a little more," HUD Secretary Alphonso Jackson reportedly told the Washington Times. Housing industry officials have expressed concern about the FHA's ability to help struggling borrowers, given that those who missed a payment in the last six months do not qualify for an FHA loan. If the White House's Office of Management and Budget approves HUD's proposal, more borrowers would qualify for FHA refinancing.
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