Politics | mortgage US May Subsidize Lenders Who Cut Mortgage Rates By John Johnson Posted Feb 12, 2009 8:41 PM CST Copied A foreclosure sign sits on top of a sale placard outside a home on the market in the south Denver suburb of Littleton, Colo., on Tuesday, Dec. 23, 2008. (AP Photo/David Zalubowski) Details are emerging on the Obama administration's plan to help homeowners: One idea is to give strapped borrowers a lower interest rate, then have the federal government chip in to defray the lenders' loss, the Washington Post reports. The Treasury Department is expected to outline its overall plan in the next week or so. Another proposal gaining favor is giving bankruptcy judges the power to change the terms of mortgages. The idea of lowering interest rates, then giving lenders a subsidy "has the advantage of being fairly simple," said a housing industry consultant. "You don't need a large federal bureaucracy to do it, (and) it is far cheaper to reduce mortgage payments than it is it to acquire a distressed property or even guarantee the loss on that property." Two problems: figuring out who qualifies and coming to grips with the notion that not all mortgages should be saved. Read These Next Firefighters 'didn't have a chance' in Idaho ambush. Obituary reveals teacher's same-sex marriage, and he's fired. Teen Motocross star repeatedly 'run over' at event. After girl goes overboard on cruise, 'hero' dad to the rescue. Report an error