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US regulators are working on a new federal program that could provide government guarantees for up to $600 billion of home mortgages to help prevent foreclosures, a source familiar with the discussions told Reuters on Wednesday.

The plan, being hammered out by the Federal Deposit Insurance Corp and the U.S. Treasury, could provide guarantees for up to 3 million at-risk mortgages, said the source, who spoke on condition of anonymity because the program is still being discussed.

AP

The Treasury Department said on Wednesday that it is working with the FDIC and other policymakers on foreclosure-prevention measures but that no detailed plan has been reached.

'We are working with the White House and through the policy process on a range of foreclosure-prevention options,' said Treasury spokeswoman Jennifer Zuccarelli, adding that the Treasury has not decided on a particular approach.

The plan would provide federal guarantees to entice lenders to ease the terms of troubled mortgages—something that lenders have been reluctant to do on a large scale so far.

The expected cost to the government would be a fraction of the value of the guarantees, as the intent of the program is to prevent defaults on home loans.