Bloomberg reports that the Treasury and FDIC are working on a plan to use $50B of the $700B bailout package to guarantee up to $500B in mortgages and second-mortgages.  The plan is to be structured in such a way that it will provide an incentive to lenders and loan servicers to modify the terms of mortgages and keep struggling homeowners in their homes.

Its too early in the process to have much in the term of details, but the full Bloomberg article can be read at the following link:

Treasury and FDIC working on foreclosure avoidance plan