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Refi plan would target 8 million underwater borrowers

Treasury secretary likes design of Oregon senator's proposal

Treasury Secretary Timothy Geithner says he likes the design of a plan proposed by an Oregon senator to establish a temporary government-backed trust that would allow about 8 million underwater borrowers to refinance at a lower interest rate at no cost to taxpayers. The plan, proposed by Sen. Jeff Merkley, D-Ore., would be available to borrowers current on their payments who meet basic underwriting criteria -- regardless of whether their mortgages are currently guaranteed by the federal government. The plan is designed to either lower monthly payments for underwater borrowers who owe more on their mortgages than their homes are worth or allow them to regain equity at a faster pace. "Four years ago, the U.S. government acted quickly and boldly to rescue major financial institutions," Merkley said in a statement. "However, we have not done nearly enough for American families who are struggling with the downturn in the housing market."  Merkley said "millions o...