From MarketWatch:
WASHINGTON (MarketWatch) — The White House is proposing to expand the role of the federal government to stem a wave of morgage defaults, President Bush said Friday, unveiling a series of steps including allowing refinancing into government-insured mortgages.
Under the plan, the Federal Housing Administration’s mortgage insurance program will be changed to allow more people to refinance with FHA insurance if they fall behind on adjustable-rate mortgages.
People who have missed mortgage payments are now ineligible for FHA insurance.The president’s plan would allow them to be eligible for FHA insurance if the amount they are required to pay each month increases, as has happened on many adjustable loans with so-called “teaser” introductory rates.
However, Bush is rejecting a wholesale bailout of borrowers and lenders alike, saying it’s not Washington’s role to provide such a backstop.“The government’s got a role to play,” Bush said at the White House. “But it is limited.”