Geithner said on Tuesday that a new homeowner bailout was in the works, so it’s not like this is really news-news, but Obama is close to unveiling a plan, reports Reuters. It sounds like something FDIC chief Sheila Bair would favour, as it involves subsidies directed towards troubled mortgages.
The Obama administration is hammering out a program to subsidise mortgage payments for troubled homeowners who have gone through a standardized re-appraisal and affordability test, sources familiar with the plan said on Thursday.
The program would be a major break from existing aid programs, which are triggered once homeowners fall into arrears.
After the news broke, stocks rallied big time to, well, the flatline. But on a day when the markets were down over 2%, flat means up.