Sheila Bair, chair of the Federal Deposit Insurance Corp. urged the government to use its emergency authority granted by Congress to offer mortgage guarantees that could encourage loan modifications, according to an AP report.
In her testimony at a Senate Banking Committee hearing, Bair said that the government should do more to help prevent foreclosures. In particular, she believes that setting standards for modifying loans to make them more affordable – and providing loan guarantees to servicers that meet those guidelines – will provide an incentive for banks to modify unaffordable mortgages.
Source: AP
