Federal regulators are reportedly working hard to come up with a plan that will provide guarantees for up to $600 billion of home mortgages aimed at encouraging lenders to refinance at-risk mortgages.The Federal Deposit Insurance Corp. and the U.S. Treasury Department are working with the White House and other policymakers to create a new, strong foreclosure prevention plan, but no announcements have been made.Knowledgeable sources say the FDIC would manage the program, which could guarantee up to 3 million at-risk mortgages. The program would also cover second mortgages and home equity lines of credit, so lenders would be protected from these losses and be more willing to participate.The program would induce lenders to lower monthly mortgage payments through lower principal, term or interest rate, for a period that would likely be five years, said a source familiar with the discussions.Source: Reuters News, Rachelle Younglai and Karey Wutkowski (10/29/2008)
Posts
