The Karol Cooley Team Blog

May 12th, 2008 4:03 PM
Under a plan devised by the Federal Deposit Insurance Corp., homeowners could receive federal loans to pay down up to 20 percent of their principal.

The program hinges on the willingness of mortgage servicers and investors to agree to restructure troubled loans and pay financing costs.

The loans in the FDIC program would be restricted to borrowers who live in their homes, and would only cover loans made between 2003 and June 2007 that were unaffordable when the borrower first signed the loan. Borrowers would not have to repay the federal loan for five years, at which point the cost of the loan would be amortized over the remaining life of the mortgage.

The FDIC will fund the plan with a $50 billion Treasury public debt offering, which the agency said would be enough to pay for modifications for approximately 1 million loans.

Source: Down Jones International News (04/30/2008)
Posted by Taylor Caughron on May 12th, 2008 4:03 PMPost a Comment (0)
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