The Federal Reserve’s Ben Bernake sent a letter to the Senate Banking Committee announcing a new loan modification program to help keep struggling homeowners in their homes. The program will be applied to whole owned mortgage assets that it aquired in the recent Fed assisted JPMorgan Chase’s purchase of Bear Stearns and support of insurance giant AIG.
The Bear Stearns portfolio is worth approximately $27 billion and it is not clear how much of the $27 billion is tied to residential mortgages. AIG assets include a $20 billion portfolio of mortgage backed securities (MBS) and a $27 billion portfolio that includes securities that are backed by mortgages.
