The Obama administration is considering plans to subsidize mortgage payments for owners facing financial troubles and allow underwater homeowners to refinance. Plans are likely to be announced Wednesday.
The refinancing proposal is expected to include a test that troubled homeowners could use to prove eligibility before their mortgage becomes delinquent.
The administration also is expected to endorse a cram-down plan that will allow judges to modify mortgages during bankruptcy procedures. And it will push for legislation that will remove obstacles that prevent mortgage servers from modifying troubled loans.
Mortgage giants Bank of America Corp., J.P. Morgan Chase & Co. and Citigroup Inc. have halted foreclosures until Obama announces details on these plans.
Source: The Wall Street Journal, Deborah Solomon and Robin Sidel