Treasury’s Stegman Says U.S. Will Expand Underwater Mortgage Aid

The Obama administration will work to refinance mortgages for so-called underwater borrowers with loans in private-label securities, U.S. Treasury Department official Michael Stegman said today in a Las Vegas speech.

Treasury may act unilaterally to aid borrowers who owe more than their homes are worth if Congress doesn’t pass legislation provide assistance, Stegman, a Treasury counselor on housing policy, said in remarks prepared for an American Securitization Forum conference.

“Legislation would facilitate a refinance, whereas under our existing authority, Treasury could only modify the most deeply underwater loans and pay investors for some amount of forgone interest,” Stegman said.

To contact the reporters on this story: Clea Benson in Washington at cbenson20@bloomberg.net; Jody Shenn in New York at jshenn@bloomberg.net

To contact the editor responsible for this story: Maura Reynolds at mreynolds34@bloomberg.net

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