The Federal Housing Finance Agency (FHFA) told Congress Monday that it is ‘actively considering’ the principal-paydown plan for borrowers in Chapter 13 bankruptcy.
The Financial Times reported Wednesday that the plan would allow underwater borrowers, with the approval of bankruptcy judges, to pay 0% interest on their mortgages for five years. The concept appears to be based on a proposal offered in November by Rep. Zoe Lofgren, D-Calif.
The White House, however, does not appear to be onboard with the idea.
‘While we continue to talk to the FHFA and other market participants about ways to help borrowers and support the housing market, the administration is not at this time considering this particular idea," White House spokesperson Amy Brundage told the FT.
To read the complete FT coverage, click here.