Released: August 21, 2008

FDIC throws IndyMac homeowners a lifeline

Source: Renae Merle, Washington Post (Free Registration)

Federal regulators yesterday announced a plan to systematically modify the loans of at least 25,000 homeowners with mortgages held by failed lender IndyMac in an attempt to create an industry model for assisting troubled borrowers.

Throwing a lifeline to distressed homeowners, the Federal Deposit Insurance Corp. will offer delinquent IndyMac borrowers new mortgages with interest rates as low as 3 percent. It is partly a challenge of speed: The FDIC wants to complete the modifications by mid-October, three months after it took control of the troubled California bank. It aims to sell off IndyMac’s assets by then.

“I have long supported a systematic and streamlined approach to loan modifications to put borrowers into long-term, sustainable mortgages—achieving an improved return for bankers and investors compared to foreclosure,” FDIC Chairman Sheila C. Bair said in a statement. 

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