Government officials and big banks are working on a plan to make refinancing available to some borrowers who are saddled with underwater mortgages, according to a new report from the Wall Street Journal. Sources close to the matter say the refinancing plan will only apply to mortgages owned by banks currently working with officials.
Plan to Help Borrowers Who Lack Equity in Homes
Government officials have been working to broker a settlement with the five largest mortgages services–Ally Financial, Bank of America, Citigroup, JPMorgan Chase and Wells Fargo–after allegations surfaced that the banks used robo-signing tactics to illegally foreclose homes, without issuing sworn affidavits verified by a notary public.
According to the Wall Street Journal, a refinancing plan may surface soon that can help homeowners refinance on homes that lack equity, a prospect that was typically difficult to achieve.
The plan is designed for homeowners who are up to date on their mortgage payments. It is one of several plans that have surfaced over the last few months as government officials look for ways to hold big banks accountable for their roles in the downfall of the housing market and record foreclosure filings.
Specifics of the Plan Still Not Clear
As noted in the report, the specifics of the refinancing plan have not been made clear as of yet. A proposal was raised in a meeting last week between government negotiators and big banks.
The paper added that it is uncertain how many borrowers could qualify for assistance. To date, discussions are still fluid and the final outcome is uncertain, but talks are expected to continue this week.
So far, no banks or officials have provided commentary on the report, but previous reports show that officials hope the settlement will help under-served homeowners who have had trouble getting help since the housing market crashed a few years ago.
