FDIC Says Government will Prevent Avoidable Foreclosures

October 23, 2008
By Kevin Cafferty

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From CNN:

Sheila Bair, chairwoman of the Federal Deposit Insurance Corp., told the Senate Banking Committee that her agency and the Treasury Department are working closely to find ways to prevent avoidable foreclosures. The plan would use the Treasury Secretary's new authority under the Emergency Economic Stabilization Act to provide guarantees to mortgage lenders.

The article goes on to say that the FDIC plans to adopt its IndyMac loan modification process (for loans that were 60 days or more past due and which IndyMac either owned directly or serviced) in a wider capacity.

Apparently this stems partly from voter outrage that the bailout package initially did much to help out flailing corporatons and little to help flailing homeowners.'

One proposal I heard on the radio last night was this: homeowners having difficulty paying their mortgages should be granted the option to extend their loans from 30 years to 40 years, bringing down the monthly payment (but increasing the overall interest paid.)

What do you think? Is there a way out of the current mortgage mess?

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