A top Democrat wants to give the Federal Housing Administration authorization to provide an additional $300 billion in mortgage guarantees to help refinance up to 2 million loans in cases where lenders agree to "substantial" principal write-downs. A bill proposed by Rep. Barney Frank would require that lenders -- or the investors who hold the rights to service a mortgage -- agree to write-downs large enough to insulate FHA from losses and provide a "meaningful reduction" in a troubled borrower's monthly payments. According to a summary of the bill released by Frank, D-Mass., the write-downs would have to be large enough to bring the loan-to-value ratio on the new, FHA-backed loan, to no more than 90 percent of a property's current appraised value. Lenders wou...
Get Inman via Facebook Messenger
Our top headlines delivered once a day.