After urging by lawmakers, the government is looking at a plan to assist more homeowners. On Thursday at a Senate Banking Committee hearing, Shelia Bair,  with the Federal Deposit Insurance Corp, told the Committee that both her agency and the Treasury Dept. are working together to start the new plan. The plan would entail using the Treasury Secretary´s recently given authority with the Emergency Economic Stabilization Act to give lenders and companies that provide/service mortgage guarantees. This was one of the key goals of lawmakers, who wanted them to ensure that banks that get taxpayer funding can begin lending once more, as well as to try and prevent foreclosure.

Bair said that "Loan guarantees could be used as an incentive for servicers to modify loans,...Specifically the government could establish standards for loan modifications and provide guarantees for loans meeting those standards." Bair feels that this would allow unaffordable loans to be changed into long term sustainable loans. She said that the government could also have compensate services for re-default loss, where the borrower gets a modified loan but still defaults. The Treasury´s interim assistant secretary for financial stability, Neel Kashkari, said that "we are looking at [the loan guarantee idea] very closely. It's something we're seriously considering."

This may be just what the public needs to have more faith in the institution as they have not been happy that the rescue package worth $700 billion, to them seems more geared on financial institutions then the actual homeowners. This is supported by the Senate Banking Committee Chairman Christopher Dodd, who said that "Now that the administration has taken strong measures to stabilize financial institutions, it is imperative that we apply the same sharp and urgent focus to help the individual homeowners whose plight is at the root cause of this crisis,".