FDIC Floats Plan To Save Delinquent Mortgages

Law360, New York (November 14, 2008, 12:00 AM EST) -- The Federal Deposit Insurance Corp. has put forward a proposal for using federal bailout money to modify mortgages so that borrowers can avoid defaulting on them.

The proposal puts the FDIC at odds with Treasury Secretary Henry Paulson, who has said that he opposes using bailout money to modify mortgages. However, the proposal might have a better chance of passing under President-elect Barack Obama's administration next year.

The FDIC said Thursday that it is seeking to create a “systematic and sustainable” framework for modifying mortgages and...
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