NEW: Fed Moving on Plan to Help Distressed Homeowners

By: Associated Press
By: Associated Press

Hoping to keep distressed borrowers in their homes, the Federal Reserve is moving ahead on a number of relief options.

The program would include lowering the amount borrowers owe on their mortgages, cutting the interest rate or lengthening the loan's terms. Fed chairman Ben Bernanke (bur-NANG'-kee) detailed the program in a letter yesterday to Massachusetts Congressman Barney Frank.

It's unclear how many homeowners would be able to take advantage of the program. But it would apply to billions of dollars worth of mortgage assets the Fed picked up in last year's bailouts of Bear Stearns and American International Group.

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