That was Topic A at a Senate banking committee hearing yesterday as Sheila Bair, chairman of the Federal Deposit Insurance Corp., said that the Bush administration might guarantee mortgages to banks. The Washington Post’s Peter Whoriskey and Zachary A. Goldfarb report that the banks, in return, would have to adjust mortgage rates to one more favorable to borrowers who face foreclosure.

Neither FDIC nor Treasury, however, has laid out a plan of how much of the $700 billion bailout money will go to back mortgages. Lawmakers complained at the hearing that Treasury was quick to assist Wall Street but has been slow in helping homeowners. In defense of Treasury, though, lawmakers wrote a bailout bill that literally just said "maximize assistance to homeowners" without ever specifying what that meant.-MB

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