FDIC home loan plan may get TARP funds soon - Bair

BALTIMORE, Nov 20 (Reuters) - The chairman of the Federal Deposit Insurance Corp said she expects the agency will be able to get funds from the $700 billion bailout fund to launch its proposed home loan modification program "very quickly."

Chairman Sheila Bair has proposed preventing about 1.5 million foreclosures under a plan that would reward participating lenders by sharing the cost of defaults on restructured loans.

It is estimated the plan could cost the federal government about $24 billion from the $700 billion Troubled Asset Relief Program (TARP). It has been met with resistance from the Treasury Department and the White House, who have said the TARP is supposed to be used for investing, not spending programs.

"I think we might be able to get some TARP money to launch this program very quickly," Bair said during a business event.

She also said that she expects U.S. bank failures to continue at a higher rate but that the "vast majority" of U.S. banks remain well-capitalized and safe and sound. (Reporting by Karey Wutkowski, editing by Gerald E. McCormick)