FDIC's Bair to propose government aid to homeowners

Sheila Bair, chairwoman of the Federal Deposit Insurance Corp., is working on a proposal that would authorize the Treasury Department to make loans to struggling homeowners. The plan would allow the Treasury to loan homeowners up to 20% of the principal owed on their mortgages, according to a draft of the plan. "This approach is scalable, administratively simple, and will avoid unnecessary foreclosures to help stabilize mortgage and housing prices," the draft said.

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