Business Beat

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.

Signs of a mortgage market in retreat continue to abound. Locally, the latest New York State Labor Department's report shows that housing related-layoffs are slowing job growth. Mortgage companies continue to lay off staff, part of a wave that began when American Home Mortgage Investment Corp. laid off 1,400 of its Melville employees in August.

Now comes another sign of the slow market from far away and yet so near. Caterpillar Inc., the Illinois company that is the world's largest earthmoving equipment maker, has reduced its earning forecast because of what some call a recession in the housing market. The news, which roiled the stock market, underscored the domino effect of the housing slowdown. If fewer people can qualify for credit, fewer new homes will be built and the demand for earthmovers will fall. Simple cause and effect.

For more on the latest locals jobs market report, click here.

Mortgage mayhem and proposed solutions take center stage Oct. 17 in Farmingdale in a forum set up by Halt Abusive Lending Transactions, the interagency task force created by Gov. Eliot Spitzer in the wake of the subprime collapse.

Four panel discussions will cover predatory lending, new standards for lending and legislative agendas. It starts with an 8:30 a.m. breakfast and remarks by state banks superintendent Richard Neiman and ends at 4 p.m. Planned speakers come from SONYMA, Center for Responsible Lending, Legal Aid of Long Island and other agencies.

The location is Roosevelt Hall, Farmingdale State College, 2350 Broadhollow Rd.
-- ELLEN YAN