Bailout plans for homeowners being floated

WASHINGTON, Oct. 23 (UPI) -- Federal Deposit Insurance Corp. Chairman Sheila Bair told key senators Thursday the Treasury Department should move to guarantee some homeowners' mortgages.

The financial bailout has so far failed to cover the root cause of the financial meltdown, Bair told members of the U.S. Senate Banking Committee.

A temporary guarantee of mortgages "could be used as an incentive for servicers to modify loans," she said.

Bair advocated for a program that would end June 30, and claimed the federal bailout plan included the authorization for the U.S. Treasury to guarantee loans "to prevent avoidable foreclosures," The Washington Post reported.

"We are passionate about doing everything we can to avoid preventable foreclosures," Neel Kashkari, the interim assistant secretary for financial stability told committee members.

He said banks would restructure the loans with "very specific instructions consistent with our objectives."

Committee Chairman Sen. Christopher J. Dodd, D-Conn., emphasized the need for the program. "There are more than 10,000 foreclosures a day. I hope there's a deep appreciation that we need to get this moving," he said.