Short Sale, Foreclosure and Strategic Default

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Friday, August 29, 2008

Loan Modification for Distressed Indymac Mortgage Loans

FDIC: Loan Modification Program for Distressed Indymac Mortgage Loans
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 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?
How does the IndyMac Federal determine whether the modified mortgage is affordable to the borrower?
How do borrowers apply for the program?
Where should borrowers interested in the program call to apply?

What loans are eligible?
The streamlined loan modifications will be available for most borrowers who have a first mortgage owned or securitized and serviced by IndyMac Federal where the borrower is seriously delinquent or in default. IndyMac Federal also will seek to work with others who are unable to pay their mortgages due to payment resets or changes in the borrowers’ repayment capacities. This streamlined approach applies only to mortgages for the borrower’s primary residence. As with all modifications, borrowers will have to demonstrate their financial hardship by documenting their income.

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