The US government is nearing a proposal to provide mortgage guarantees to lenders that agree to restructure home loans to ensure affordable payments. Under the plan, lenders willing to modify troubled loans so that the monthly loan payment was no more than a certain percentage of income – possibly the 38 per cent figure used by the FDIC at IndyMac – would be able to apply to secure a government guarantee against some or all of the additional loss if the modified loan went into default.

This entry was posted by Tracy Alloway on Thursday, October 30th, 2008 at 3:35 and is filed under Capital markets. Tagged with mortgage lender. Edit this entry.