FDIC & IndyMac Work To Help Distressed Borrowers

Nov 10th, 2008 @ 5:29 PM by Alden Smith

The NBC Nightly News tonight reported on the hopes of the FDIC and IndyMac to be able to step in and modify mortgages for people who are in financial trouble and about to lose their homes. This is a good move on their part – they will modify the loans by dropping the interest rates, which will drop the monthly mortgage payment down to a place where people can afford them. Modifications would be designed to achieve sustainable payments at a 38 percent debt-to-income (DTI) ratio of principal, interest, taxes and insurance.

All this comes at a time when the economy continues to worsen. Circuit City is declaring, and DHL has said it will cease operations in the United States, effectively putting about 10,000 people out of work. Many people in Ohio, an especially hard hit state, are in even deeper trouble now.

IndyMac is a part of the FDIC process. They will implement a new program to systematically modify troubled mortgages. This move will maximize value for the FDIC. It looks like a win-win situation for not only mortgage holders, but both the FDIC and IndyMac as well. It appears that this is not something that will get lost in the bureaucratic shuffle, for some loans go for review by the end of this week.

The focus will be in the beginning on loans that are seriously delinquent. It appears that IndyMac is contacting distressed borrowers. Contact information will lead the borrower to the proper channel to begin the process. If you have not been contacted, and are in financial distress, contact your bank to be put in touch with the right person. Calls can be made to 1-800-781-7399 to talk with an IndyMac Federal customer service specialist.

For further information on this program, consumers can visit the FDIC website at www.fdic.gov. IndyMac can be reached online at www.imb.com.

According to the NBC Nightly News, the Fed is encouraging other banks to jump into this program. If this is done, there could be some real relief in the mortgage market. Consumers should be aware, however, that these programs do not lower you mortgage principal, but are designed to make the mortgage affordable. If you are looking to get in and think that there will be a substantial decrease in the mortgage amount, this program is not for you.

Posted in Mortgage Refinancing, Mortgages
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