The Office of Thrift Supervision is preparing a plan to help mortgage borrowers who owe more than their homes are worth and to discourage them from abandoning those properties, the Washington Post reported today. Under the regulatory agency’s proposal, still in its early stages, these borrowers would refinance into government-insured loans that cover the current value of their homes. The refinancing would pay part of what’s owed to the original lender. For the remainder, the lender would get what the plan’s backers call a “negative equity certificate.” The lender could redeem the certificate if the home is eventually sold at a higher price. The agency, which has been closely involved in talks about government responses to the mortgage problems, focused on borrowers whose home values have plummeted because a growing number of people are in that situation and unable to refinance.
Bankruptcy Los Angeles