At the same time, the administration is considering another set of measures for homeowners, including tax breaks, interest rate subsidies, additional purchases of GSE debt--as the Federal Reserve has done recently--and even direct assistance, the source said. It is unclear exactly what the latter would entail.
If progress continues to be made an announcement is likely late next week, according to the source.
Earlier this week, Treasury Secretary Timothy Geithner said the administration was considering a "range of options."
Talks on aiding the financial sector resumed Saturday, following a round Friday when speculation arose that a snag had been hit over the bad bank concept, concerning the thorny issue of how to price the assets, which the banks would sell at a discounted price to the government entity.
In his weekly radio address Saturday, President Obama pledged to help homeowners by lowering mortgage costs under a new plan he said would be unveiled soon, which would revive the financial system and "get credit flowing again."
Many of the consumer measures understood to be under discussion have been at the top of the agenda of Congressional Democrats, who were disappointed by the Bush Administration's execution of the TARP plan because they felt it focused too much financial aid on Wall Street firms, whilch failed to pass along some of the benefits by engaging in new lending or modifying mortgages to avoid foreclosures, an aggravating factor of the housing crisis.
Rep. Barney Frank (D.-Mass.) a fierce critic of the TARP's administration who chairs the powerful House Financial Services Committee, has championed housing relief and earlier this month introduced legislation revising the TARP. That specifically called for $40-$100 billion in funding for easing the foreclosure problem.
Frank's committee is expected to begin mark up of related homeowner relief legislation Tuesday, as part of the overall plan, according to the source.