FDIC, U.S. Treasury Clash On Anti-Foreclosure Plan

[Purveyor]

Source: Reuters

By Karey Wutkowski and Patrick Rucker

WASHINGTON (Reuters) - A top U.S. banking regulator unveiled a plan on Friday to prevent about 1.5 million foreclosures, breaking ranks with the Bush administration by demanding bailout funds be diverted from banks to consumers.

The Federal Deposit Insurance Corp said the plan would modify millions of delinquent mortgages and the government would reward participating lenders by sharing the cost of defaults on restructured loans.

The dispute over housing policy during the administration's final weeks spilled into the public as a the President George W. Bush administration renewed its opposition to using money from the $700 billion bailout fund to support such a foreclosure-prevention program.

"The FDIC proposal at the end of the day is a spending proposal," Treasury Interim Assistant Secretary Neel Kashkari told a Congressional hearing on Friday.

Kashkari said the Troubled Assets Relief Program (TARP), which the Treasury controls, was designed for making investments in the financial system, not giving aid.

Read more: http://www.reuters.com/article/euRegulatoryNews/idUSN1443340520081114

[Joe Chi Minh]

1. Brilliant! Absolutely terrific. Let's hope they move fast.

[dipsydoodle]

2. One of the guys at Forbes

suggested this before Congress passed the bailout. No link - I watchd him spoeak when interviewed : on CNN Int.I think.

[Celebration]

3. Sheila Bahr for Secretary of Treasury n/t

[soothsayer]

4. FDIC doesn't even have enuff $$ to protect our savings. WTF are they doing?