Another day, another bailout. There is now talk of a half trillion dollar plan to help out people with troubled mortgages.
Bloomberg: The U.S. Treasury and the Federal Deposit Insurance Corp. are considering a plan that may provide at least $500 billion in government guarantees for troubled mortgages, according to people familiar with the matter.
The program, which might help millions of homeowners refinance into affordable loans, would require lenders to restructure mortgages based on a borrower’s ability to repay. Under one option, the industry would keep lower monthly payments for five years before raising interest rates, the people said.
FDIC Chairman Sheila Bair discussed the program today at an international deposit insurers conference in Arlington, Virginia, without offering details. “A framework is needed to modify loans on a scale large enough to have a major impact,” Bair said.
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