Originally posted on Home Financing News.

Various sources are reporting on new attempts by Merrill Lynch and Citigroup to obtain foreign investment in an attempt to shore up mortgage-related losses.

Merrill Lynch looks likely to obtain between $3 billion and $4 billion from Middle Eastern government funds. Meanwhile, Citigroup could get up to $10 billion from a variety of foreign sources, and is also expected to cut its dividend in half in an effort to save around $2.5 billion a year.

Both companies are keen to secure the investment funds before they release their earnings reports next week. Such investments will likely provoke political debate, especially during an election year. But many industry analysts are upbeat about the prospect of two of Wall Street's financial heavy hitters stabilizing.

From the mortgage industry's perspective, fresh market investment could help to calm the wider market, relax jittery lending institutions, and enable more loans to be funded.