October 18, 2011 / 3:49 AM / 8 years ago

Officials, banks to tackle mortgage refinancing plan: report

A vacant home for sale is pictured in Yonkers, New York, October 26, 2010. REUTERS/Mike Segar

(Reuters) - Officials and big banks are working on a plan that would make refinancing available to some borrowers whose houses are worth less than their loans, so long as they are current on mortgage payments, the Wall Street Journal reported.

Such borrowers typically are not able to refinance because they lack equity in their homes. The plan would apply only to mortgages owned by the banks, the Journal said, citing people familiar with the matter.

Federal officials have been trying to broker a settlement with the five largest mortgage servicers - Ally Financial Inc, Bank of America, Citigroup Inc, J.P. Morgan Chase and Wells Fargo & Co — the Journal said.

It is not clear how many borrowers would qualify for help, the paper added.

Officials are pushing for a plan in a bid to break a legal impasse with big banks over alleged foreclosure abuses and ease problems in the housing market, the paper said.

Discussions are still fluid and any final outcome is uncertain. Talks between government officials and the banks are expected to continue this week, the newspaper said.

JPMorgan declined to comment to Reuters on the Journal report. Reuters could not immediately reach the other four lenders for comment outside regular U.S. business hours.

Reporting by Sakthi Prasad in Bangalore; Editing by Vinu Pilakkott

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