Treasury sees mortgage plan as add-on to bailout

WASHINGTON (Reuters) - A private-sector mortgage insurance plan floated by Republicans in the House of Representatives would be acceptable to the Bush administration as an addition to core legislation for a U.S. Treasury $700 billion asset rescue plan, a Treasury official said on Saturday.

Asked whether the House plan would be acceptable as an addition, the official said, "That would be fine". But it would not be acceptable as an alternative to the plan proposed by U.S. Treasury Secretary Henry Paulson, which would use taxpayer funds to purchase troubled assets from financial institutions.

A group of House Republicans late on Thursday had proposed a private-sector funded mortgage insurance program as an alternative to tapping taxpayers fund to ease the credit crisis, causing negotiations over the bill to drag into the weekend.

(Reporting by David Lawder, Editing by Sandra Maler)