The Bush administration is considering a roughly $40 billion proposal to help forestall foreclosures, one of a series of ideas under consideration designed to address the
Wall Street Journal
At a Senate Banking Committee hearing Thursday, Federal Deposit Insurance Corp. Chair Sheila Bair is expected to suggest the government give banks a financial incentive to turn troubled loans into more-affordable mortgages, the newspaper reports, citing a person familiar with her testimony. Under the proposal, the government would share in any future losses on the new loans with lenders.
is discussing this option, the
reports. It is also moving ahead with separate plans to use part of its $700 billion financial rescue fund to directly buy and renegotiate mortgages.
Treasury officials are slated to privately brief members of the House Financial Services Committee Thursday on their plans to assist homeowners, among other matters.
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Under Bair's idea, new mortgages would have to meet certain conditions to qualify for partial government backing. The list of criteria could not be learned, the newspaper says. Previous government plans have required that owners live in their homes and be relatively up to date on their mortgage payments.
Other possibilities include using mortgage giants
to bring down mortgage rates and insuring inexpensive reworked loans through the Federal Housing Administration, according to the
This article was written by a staff member of TheStreet.com.