Housing rescue: What you need to know

In brief: Like the Dodd and Frank plans, a Bank of America proposal calls for buying up troubled mortgages, modifying them to make them affordable, and repackaging them for sale in secondary markets. The difference: Freddie Mac and Fannie Mae, two government sponsored enterprises, would buy the troubled loans.

A similar plan from Credit Suisse would refinance the troubled loans with FHA-insured mortgages. These would be private transactions backed by insurance administered by the FHA. Borrowers would pay for the insurance

The argument: This approach creates both affordability and liquidity. Giving the loans government backing would encourage private lenders to issue these loans and make getting a mortgage easier.

The plan would jump-start the market for mortgages by establishing a true market value for the securities backed by these loans. Then investors would start buying the securities again, creating liquidity and making it easier for borrowers to get a mortgage.

Who backs it: Lenders and many consumer and community activist groups support the banks' ideas. Free-market advocates generally like them because they encourage the market to work independently of the government.

Who's against it: The Bush administration, which so far is trying keep the government in advisory or support roles.

Taxpayer price tag: No cost to taxpayers has been discussed, but the Bank of America plan would involve the same kind of seed money - $10 billion to $20 billion - as the Dodd and Frank plans.

While the Credit Suisse proposal wouldn't require an initial investment, it would transfer risk from private lenders to the government, which would mean that taxpayers may have to bear some costs of defaults.

Status: No congressional bill with these provisions has been written yet.

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