It’s almost impossible to tell whether this proposal from the Federal Deposit Insurance Corp. will fly or not, but for the moment it sounds like good news to those struggling with mortgages.
The FDIC announced Wednesday that it is proposing that Congress authorize the Treasury Department to make loans to borrowers with unaffordable mortgages to pay down up to 20 percent of their principal.
The repayment and financing costs for these Home Ownership Preservation loans would be borne by mortgage investors and borrowers.
The agency that insures deposits up to $100,000 in U.S. banks and thrift institutions said the plan would be administratively simple, and will avoid unnecessary foreclosures to help stabilize mortgage and housing prices. In addition there is no cost to the government, it said. Find details.