US regulators turn their attention to negative equity

US regulators switched their focus to negative equity last month, giving an indication of what could be the next big worry in the US housing market.

The Office of Thrift Supervision (OTS), which supervises savings associations, has begun work on a plan to assist borrowers whose houses have fallen in value below the cost of their mortgage. The proposal comes as several analysts at leading banks issued warnings about the effect of negative equity on the housing market.

Under the OTS plan, borrowers

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