New Mortgage Plan Floated for Those Underwater, WSJ

Underwater Borrowers Current on Payments Would Get Help

State and federal officials are pushing a plan that could help some "underwater" borrowers get refinancing assistance in the latest government bid to break a legal impasse with big banks over alleged foreclosure abuses and ease problems in the housing market...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, according to people familiar with the matter. 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. It isn't clear how many of those borrowers would qualify for help. Around 20% of all U.S. mortgages are owned by U.S.-chartered commercial banks; the majority are held by investors in mortgage-backed securities.The proposal would be part of a settlement with By Ruth Simon, Nick Timiraos, Dan Fitzpatrick, Oct. 18, 2011 WSJ

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WSJ