The Treasury Department is reviewing an Federal Deposit Insurance Corp. proposal, which includes using credit enhancements as a tool to encourage loan modifications.

The Treasury Department is facing renewed congressional pressure to address rising foreclosures after committing $250 billion to recapitalize the banks. Treasury assistant secretary Neel Kashkari told Senate Banking Committee Christopher Dodd, D-Conn., that department officials are looking hard at the FDIC proposal, along with other ways to avoid "preventable" foreclosures.

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