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Subprime Lending

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OTS Weighs ‘Negative Equity Certificates’ For Underwater Borrowers 

Feb 21, 2008By

The Office of Thrift Supervision is weighing a proposal that would allow lenders to refinance underwater borrowers into a government-insured loan without immediately forgiving principal, creating a so-called “negative equity certificate” to cover the difference between the original loan amount and current property values.

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