The Obama administration's plan to refinance underwater borrowers with private-label mortgages was supposed to be dead on arrival – but it appears Sen. Richard Shelby of Alabama, the ranking Republican on the Banking Committee, wants to hear more.

At a Senate Banking Committee hearing Tuesday, Shelby said his goal is to craft “common sense legislation" to address the serious problems in the housing market.

He also complained to Housing and Urban Development secretary Shaun Donovan that he has not yet seen the refinancing plan that President Obama is urging Congress to pass. "When will the administration's housing plan to be sent up for us to consider," Shelby asked.

"It is fair to say we have shared" an outline of the refinancing plan in a "series of meetings with your team," the HUD secretary told the Senator. "But we want to make sure that we have the input of members of his committee and others in Congress before we settle on a final legislative proposal.”

On Feb. 1, the White House unveiled the refinancing plan that would provide a “streamline” refinancing program for borrowers who can't take advantage of existing Federal Housing Administration, Fannie Mae and Freddie Mac refinancing programs.

Under the proposal, the largest banks would be taxed to create a separate FHA fund that covers any losses on the refinancings.

Donovan did not mention the bank tax in his exchange with Shelby. The American Bankers Association opposes the tax, claiming it would reduce the banks' ability to lend by $100 billion.

"Senator Shelby wants to work with Democrats to produce a plan that will actually deliver results.  However, he can't evaluate the president's plan based only on a press release and an outline.  We need details," the senator's spokesman, Jonathan Graffeo, told ASR sister publication National Mortgage News.

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