U.S. Prepares Loan Modifications: Reports

The U.S. government is working on a new federal program that could provide government guarantees for up to $500 billion to $600 billion of home mortgages to help prevent foreclosures, according to published reports.

The plan, being put together by the Federal Deposit Insurance Corp. and the Treasury Department, could provide guarantees for up to 3 million at-risk mortgages, Reuters reports, citing a source.

A final deal had not been reached as of Wednesday and negotiations could still fall apart, but government agencies were contemplating using around $50 billion from the recently passed bailout of the financial industry to guarantee about $500 billion in mortgages, the Associated Press reports. ...