In Depth Analysis: CalculatedRisk Newsletter on Real Estate (Ad Free) Read it here.

Tuesday, October 18, 2011

Mortgage Settlement Update: A Refinance Plan for Certain borrowers with Negative Equity

by Calculated Risk on 10/18/2011 12:04:00 AM

The following report suggests that a refinance plan for borrowers with negative equity might be part of any mortgage settlement. This would only apply to mortgages owned by the banks - and for borrowers who are current.

From the WSJ: New Mortgage Plan Floated

The plan under consideration would make refinancing available to some borrowers whose houses are worth less than their loans, so long as they are current on mortgage payments ... Such borrowers typically aren't able to refinance because they lack equity in their homes. The plan would apply only to mortgages owned by the banks. ... Around 20% of all U.S. mortgages are owned by U.S.-chartered commercial banks ...