WASHINGTON--A government source tells FOX Business that the Treasury Department and the Federal Deposit Insurance Corp. are considering "options for direct borrower assistance" under the new $700 billion economic stabilization plan.

The structure and form of assistance has not been determined. The government source says the Treasury's top priority is implementing its new capital plan for banks and its distressed asset purchase plan, authorized in the stabilization plan, and that any direct government assistance for mortgagees is not imminent.

But analysts and housing advocates have said the government could use some of the money under the new Troubled Asset Relief Program, or TARP, to fund a new entity or plan for directly refinancing mortgages for qualified homeowners struggling to make their monthly payments. Sen. John McCain, the Republican presidential candidate, has proposed using $300 billion of TARP funding to refinance distressed mortgages.

In an interview with FOX Business this morning, FDIC chairman Sheila Bair suggested a plan could be announced shortly. Click here to watch the interview

"I think everyone is committed to more aggressive foreclosure prevention and using a component of the TARP to do more direct intervention to reduce foreclosures, she said. I know Secretary (Henry) Paulson… he's very committed to leveraging TARP resources to more directly attack loan modifications as well, and I think you will be seeing that shortly."

In a separate interview on Fox Business, Paulson said, "We're also, and have been working hard for a long time, well over a year, working with Sheila Bair and many others, and the industry, in addressing foreclosures, in doing everything we can to prevent those foreclosures that are preventable, and we're going to be able to do more."

Paulson has repeatedly said he would work to avoid preventable foreclosures as part of the new stabilization plan. Earlier this week, he announced $250 billion of the plans funding would be used to provide capital to banks.

Workouts for struggling homeowners was a priority to Democrats in Congress, who added specific instructions to the stabilization bill for establishing foreclosure avoidance programs as part of the plan.

At the FDIC, Bair has led government efforts to provide relief to homeowners facing foreclosure. After the FDIC takeover of IndyMac, the big California mortgage lender, the FDIC launched a mortgage modification program to assist IndyMac mortgage customers.