FDIC chief urges aid to at-risk homeowners

Federal Deposit Insurance Corp. chairman Sheila Bair this morning urged the government to exercise the power provided by the $700 billion Emergency Economic Stabilization Act of 2008 to assist homeowners facing foreclosure. Reducing foreclosures can be accomplished by providing loan guarantees to banks as an incentive to modify loans to troubled homeowners, Ms. Bair said in prepared remarks during testimony before the Senate Banking Committee. “Minimizing foreclosures is important to the broader effort to stabilize global financial markets and the U.S. economy,” she said. “The continuing trend of unnecessary foreclosures imposes costs not only on borrowers and lenders, but also on entire communities.” Last week, Ms. Bair criticized the $700 billion rescue package for not doing enough to prevent Americans from losing their homes.