A plan by senior Democratic lawmakers to offer federal guarantees for between $300bn and $400bn of refinanced mortgages was largely endorsed by a panel of US banking regulators at a congressional hearing yesterday, although concerns were expressed about some specific provisions. Financial Times
'Current circumstances may dictate that the federal government take a more direct role in facilitating solutions for many thousands of troubled mortgages to avoid more dire consequences for all Americans,' Sheila Bair, who chairs the Federal Deposit Insurance Corporation, told the House financial services committee.
The White House has resisted calls for more direct use of public funds in the troubled housing market, saying it could amount to bailing out speculators.