The Loan Arranger Rides Again

Stock market reacted positively to the "third leg" of Obama's...three legged...stool...of financial stability, or whatever. The plan? Direct mortgage assistance from the government to struggling homeowners.

The Obama administration is hammering out a program to subsidize mortgage payments for troubled homeowners who have gone through a standardized re-appraisal and affordability test, sources familiar with the plan said on Thursday.

The program would be a major break from existing aid programs, which are triggered once homeowners fall into arrears.

Under the plan being contemplated, mortgage companies would use a uniform eligibility test even before a borrower becomes delinquent, sources said.

The administration hopes the mortgage industry will soon agree to a set of standards that will allow it to move quickly to modify many home loans.

Dow erased a 200 point loss in the last hour on news of the plan, and frankly it's the first really strong plan Obama and Geithner have pulled out of their hat.