Developing Story: FDIC May Aid in Foreclosure Rescueby Tim Manni
A few sources have begun to leak information regarding the FDIC’s negotiations with the Treasury Department to rework as many as three million mortgages. The initiative comes as Congress has grown increasingly frustrated with the $700 billion allotted for a financial rescue being mostly dedicated to financial institutions rather than homeowners.
The program which is estimated to cost between $40-$50 billion, is designed to get lenders to agree to reduce a borrower’s monthly payments by either reducing their interest rate or the principal on the loan. The appeal for lenders resides in the governments guarantee to repay the lender a portion of their losses if the homeowner defaults on the newly restructured loan.
When there’s an official announcement we’ll be sure to let you know.