The U.S. administration is working out a plan to subsidize mortgage payments for homeowners with problem loans who have gone through a standardized reappraisal and affordability test, Reuters reported Thursday, citing sources familiar with the plan.

Fannie Mae (FNM) and Freddie Mac (FRE) are expected to play a supporting role but are not expected to expand their securitizations.

According to the report, James Lockhart, director of the Federal Housing Finance Agency, said the mortgage finance industry was keen to have a standardized mortgage modification standard.

Full story at www.reuters.com

-Dow Jones Newswires; 201-938-5500