For example, the Federal Deposit Insurance Corporation (FDIC) has proposed that, for loans modified in accordance with a streamlined process adapted from the protocol that the FDIC has used for IndyMac loans, the government would agree to absorb some of the losses on the modified loans that redefault.
Another approach would have the government share with the servicer the cost of a reduction in the borrower's monthly payment. Alternatively, the government might make payments directly to homeowners who – because of temporary job loss or a similar event – need help meeting their mortgage obligations.