On February 10, the U.S. Treasury Department introduced the Financial Stability Plan, part of which focuses on stemming foreclosures and restructuring troubled mortgages to help alleviate the housing crisis. The Treasury announced that it will soon introduce a comprehensive plan that builds on the work of congressional leaders and the Federal Deposit Insurance Corporation, elements of which will include:
- attempting to drive down overall mortgage rates, partly by spending as much as $600 billion on purchases of government-sponsored enterprise mortgage-backed securities and debt;
- committing $50 billion to prevent avoidable foreclosures by helping to reduce monthly mortgage payments;
- establishing loan modification guidelines and standards for government and private programs;
- requiring all Financial Stability Plan recipients to participate in foreclosure mitigation plans consistent with Treasury guidance; and
- building flexibility into the Hope for Homeowners program and the Federal Housing Administration to enable loan modifications for a greater number of distressed borrowers.