October 29, 2008 / 5:49 PM / in 9 years

US eyes anti-foreclosure plan worth up to $600 bln

WASHINGTON, Oct 29 (Reuters) - U.S. regulators are working on a new federal program worth up to $600 billion that would provide government guarantees of home mortgages to help prevent foreclosures, a source familiar with the discussions told Reuters on Wednesday.

The Federal Deposit Insurance Corp and the U.S. Treasury Department were hammering out the foreclosure prevention program, which could provide guarantees for up to 3 million at-risk mortgages, the source said.

The program would be managed by the FDIC and would require banks, savings and loans, investment funds, hedge funds and other mortgage holders to restructure them based on homeowners’ ability to pay, according to the source.

Reporting by Rachelle Younglai and Karey Wutkowski, editing by Leslie Gevirtz

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