If additional states - and potentially the federal government - follow in the footsteps of Ohio, financially stapped U.S. homeowners may have more options to refinance their mortgages. The state plans to issue municipal bonds in order to fund a mortgage refinance program for subprime borrowers, market participants said last week.

Such a plan was discussed on Capitol Hill last week as well as members of Congress - under increasing pressure to act on the matter of subprime lending - kicked around potential courses of action to aid borrowers currently in "predatory" loans. Talks also revolved around how to stop such loans in the future.

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