Treasury Considering New Mortgage Rate Plan

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WASHINGTON - The Treasury Department is considering a
program to encourage banks to make mortgage loans at low rates to
help revive the battered housing market.
That's according to Neal Kashkari, who heads the government's $700 billion financial rescue effort.
Under the proposal being pushed by the financial industry, Treasury would seek to lower the rate on a 30-year mortgage to 4.5 percent by purchasing mortgage-backed securities from Fannie Mae and Freddie Mac. It's unclear exactly how much the plan would cost.
Kashkari told a Senate subcommittee today it's one of the options the administration has under review.
He says Treasury is striving to use the ``right tools for the right job'' in an effort to help as many homeowners as possible.