Consumer Law

FDIC's Foreclosure Prevention

By Alan White

The FDIC, as conservator for IndyMac, has suspended all foreclosures and is aiming to modify 40,000 out of 60,000 currently delinquent IndyMac mortgages.  In the six weeks since the takeover FDIC has mailed out 15,000 loan modification proposals, and has already received signed agreements from 3,500 homeowners.  On average payments are being reduced by $350 monthly.  Details are in Chairman Sheila Bair's testimony today before the Senate Banking Committee. 

In contrast, August and September loan modifications by subprime and alt-A servicers generally are still wildly inconsistent and falling short.  Nearly a third of modifications are still increasing, rather than decreasing, monthly payments.  Some servicers are aggressively modifying loans while others show virtually no modification activity.  I will post a more detailed report when I have the October numbers.

Full post as published by CL&P Blog on October 23, 2008 (boomark / email).