FDIC Offers Loan Mod 'Kit' to Servicers

The Federal Deposit Insurance Corp. is offering to share its playbook on streamlined loan modifications with all residential servicers. The process was developed at IndyMac FSB, now a ward of the government. FDIC said it will share its "Mod in a Box" guide to provide servicers with the "necessary tools to facilitate streamlined and systematic loan modifications." According to FDIC chairman Sheila Bair, the IndyMac approach is effective in dealing with mortgages in portfolios and securitized pools. "I would encourage all industry participants to adopt the FDIC loan modification program as the standard approach in dealing with the grave problems facing us with continued mounting foreclosures," she said. FDIC inherited 60,000 delinquent mortgages when IndyMac was placed into conservatorship in July. Under the program FDIC mailed 23,000 loan modification proposals to borrowers and completed more than 5,300 transactions after verifying the borrowers' income. On average, the modifications cut a borrower's monthly payment by $380 or 23%.