Mortgage plan could cost taxpayers $6bn

Again the left proposes to subsidize irresponsibility and you pay.

A Democratic proposal to use public funds to guarantee up to $300bn in mortgages could cost the US taxpayer up to $6bn, according to a preliminary assessment by the Congressional Budget office.

Barney Frank, the powerful chairman of the financial services committee, on Thursday unveiled details of legislation to stem the wave of US home foreclosures through an expansion of the Federal Housing Administration.

A similar bill is being considered by the Senate. While the government could make money depending on the performance of the new loans, it could also incur losses of between 1 and 2 per cent of the total amount, the CBO told lawmakers.