New Treasury Mortgage Incentive To Reduce Loan Payments

According to Reuters The U.S. Treasury Department will on Tuesday tap a $50 billion housing rescue fund to pay off mortgage investors and reduce monthly payments for millions of borrowers, said a senior administration official.

"Mortgage servicers that own a small stake in costly loans will receive a cash payment to either erase the debt or agree to accept a reduced return on their investment.

"It will be a shared effort with lenders, investors, borrowers and the government to ease or extinguish second-lien mortgage payments," a senior administration official told Reuters."

Officials will also announce new incentives for the Hope for Homeowners program conceived last summer to refinance hundreds of thousands of struggling borrowers.