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Modification Program for Distressed Indymac Mortgage Loans |
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Loan Modification Program for Distressed Indymac Mortgage Loans IndyMac Federal Bank, FSB (“Indymac Federal”) will implement a new program to systematically modify troubled mortgages. The program is designed to achieve affordable and sustainable mortgage payments for borrowers and increase the value of distressed mortgages by rehabilitating them into performing loans. This in turn will maximize value for the FDIC, as well as improve returns to the creditors of the former IndyMac Bank and to investors in those mortgages. The new program will help IndyMac Federal improve its mortgage portfolio and servicing by modifying troubled mortgages, where appropriate, into performing mortgages. Below are some questions and answers regarding the program: What loans are eligible? What loans are eligible? The goal of this streamlined loan modification program is to achieve improved value for IndyMac Federal by turning troubled loans into performing loans and, thereby, avoiding unnecessary and costly foreclosures. Accomplishing this goal will reduce the costs to the FDIC of the failure of IndyMac Bank and provide improved returns to investors in securitized mortgages. Some mortgages serviced by IndyMac Federal are subject to additional contractual terms governing loan modifications. While additional steps are necessary to comply with those contracts, IndyMac Federal will work to expedite approvals for modifications to help eligible homeowners keep their homes. IndyMac Federal will only make modification offers to borrowers where doing so will achieve an improved value for IndyMac Federal or for investors in securitized or whole loans. Modification offers will be provided consistent with agreements governing servicing for loans serviced by IndyMac Federal for others. The modification program does not guarantee a modification offer for IndyMac Federal borrowers. What is the timeline for rollout
of offers? How will you determine which loans
receive modification proposals first?
What modification options
will be available to borrowers? If, consistent with maximizing the net present value of the mortgage, an interest rate reduction below the current Freddie Mac survey rate is necessary to achieve a 38% DTI, then IndyMac Federal could reduce the rate further for five years. After five years, the interest rate would increase by no more than 1% per year until it capped at the Freddie Mac survey rate where it would remain for the balance of the loan term. Other modification features could be combined with an interest rate reduction, as necessary and consistent with maximizing the value of the mortgage, to achieve sustainable payments. It is important to remember that there are no fees or other charges for this modification. All unpaid late charges will be waived. How does IndyMac Federal
determine whether the modified mortgage is affordable to the borrower? How do borrowers apply for the program? Once a borrower has received a proposed modification offer, all it takes for them to bring their mortgage current and qualify for a final modified mortgage is to
The borrower must then continue to make timely payments at the modified monthly payment amount and comply with all other terms of their mortgage agreements. If the borrower’s verified income information demonstrates that they do not qualify for the proposed modification, IndyMac Federal will contact them to discuss alternatives that may help them keep their home. Where should borrowers
interested in the program call to apply? For further information on Indymac Federal please visit: http://www.fdic.gov/bank/individual/failed/IndyMac.html Remarks by FDIC Chairman Sheila C. Bair on the IndyMac Loan Modification Announcement: http://www.fdic.gov/news/news/speeches/archives/2008/chairman/spaug2008.html |
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Last Updated1/13/2009 | Customer Service |
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