Homeowner Bailout Update

| Wed Oct. 29, 2008 6:47 PM EDT

HOMEOWNER BAILOUT UPDATE....The Washington Post reports that the White House is getting ready to announce a plan that would help up to 3 million homeowners avoid default:

Under the program being discussed, the lender would agree to reduce borrowers' monthly payments based on their ability to pay. The reductions could be achieved by lowering the interest rate, slashing the amount owed or extending the repayment period.

....In exchange, financial institutions that agree to participate in the program would receive a government guarantee for a portion of any losses occurring if borrowers default on the reconfigured loan.

For what it's worth, a Treasury spokesman told the Wall Street Journal that media reports about the program are "simply inaccurate," so take this with a grain of salt. Still, I'll bet it's not too far off the mark, and it sounds like a decent plan. It would be nice to see a chunk of that $700 billion being put to use helping someone other than a bunch of bankers.

Get Mother Jones by Email - Free. Like what you're reading? Get the best of MoJo three times a week.