4  BIS Review 15/2009  relatively illiquid Ginnie Mae securities to which the borrowers' interest rate is tied. The government might also consider purchasing delinquent or at-risk mortgages in bulk and then refinancing them into the H4H or other FHA programs. In addition, government funds might be used to offer some general inducement for servicers to modify loans at risk of default.
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.