Friday, November 14, 2008

FDIC plan expands efforts on foreclosures

(November 13th, 2008 - The Denver Post)

WASHINGTON — Officials at the Federal Deposit Insurance Corp. on Thursday detailed a plan to prevent 1.5 million foreclosures in the next year by offering financial incentives to companies that agree to sharply reduce monthly payments on mortgage loans.

The proposal, which has the support of leading congressional Democrats, would considerably expand the scope and force of efforts to stem foreclosures. Agency officials estimated the cost to the government at $22.4 billion.

FDIC Chairman Sheila Bair continues to face opposition within the Bush administration. Treasury Secretary Henry Paulson said Wednesday that he opposed funding the plan from the government's $700 billion rescue fund. But proponents increasingly view the Bush administration as a roadblock with an expiration date.

The FDIC proposal, which is to be announced today, goes further toward helping borrowers than existing modification efforts. And, the initiative is designed to be less expensive for mortgage companies because the government will pick up part of the tab. The Washington Post

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