Support is building for an anti-foreclosure plan proposed by Sheila Bair, the head of the Federal Deposit Insurance Corporation, in spite of resistance from the Bush administration.
Bair, who was appointed by the outgoing administration, told Reuters yesterday she expects her agency to be able “very quickly” to obtain money from the $700bn troubled asset relief programme (Tarp), although she was still in talks with Hank Paulson, Treasury secretary.
The FDIC estimates that the plan would cost $24.4bn . It would see mortgage servicers and investors pushed to modify loans to meet a basic affordability test. The government would agree to absorb half the loss on any modified loans that subsequently go into