FDIC Chairwoman Sheila Bair, a strong advocate of streamlined loan modifications, told Congress 1,200 at-risk borrowers had received loan modifications since the program was announced in late August.
By the end of August, 4,000 loan modification proposals had been sent to borrowers and through September 17, 7,400 have been mailed.
On average, the completed loan modifications have reduced monthly mortgage payments for troubled borrowers by $430.
“In implementing the loss-mitigation program, IndyMac Federal’s first priority is maximizing the value of the mortgages by assisting borrowers who are seriously delinquent or in default on their mortgages,” Bair said in a prepared testimony posted on the FDIC website.
“However, where its servicing agreements permit, IndyMac Federal also is working with borrowers who face upcoming resets or other changes in their ability to repay.
“Under the program, modifications are only being offered where doing so will result in an improved value for IndyMac Federal or for investors in securitized or whole loans, and where consistent with relevant servicing agreements.”
Of the 60,000 delinquent mortgage serviced by Indymac Federal Bank, 40,000 are currently eligible for a loan modification.
Bair noted that the FDIC is currently working with the servicers of the 20,000 remaining delinquent mortgages in an effort to apply the loan modification program.
Last month, details of the program were announced, which in some cases, allow borrowers to enjoy mortgage rates as low as three percent for up to five years assuming they’re unable to afford the current Freddie Mac surveyed rate.