In the midst of all the market turmoil, one innovative program to deal with the underlying housing and mortgage issues is moving ahead smartly. You will recall that, fast upon the heels of its takeover of IndyMac, the FDIC announced an aggressive program to modify loans owned or serviced by IndyMac to prevent avoidable foreclosures.
Initially, the FDIC wrote almost 5,000 borrowers and proposed to modify their loans and reduce their payments-all they needed to do was send back a check in the new payment amount, sign a modification agreement, and grant permission to check the borrower's tax return. (Where the tax return information does not conform to information in IndyMac's files, the FDIC requires further verification of borrower income.) One of the best aspects of the program for borrowers is that the letter they received included a specific new payment amount, not just an invitation to call their servicer.
So far IndyMac has sent out thousands more modification proposals and, to date, the FDIC has gotten more than a 70% response rate to these mailings. Several thousand loans have now been restructured. [newsamerica.net]Now, remember the debate last night...McCain was going to offer us the very policy that the FDIC has already initiated. I wonder if he even knew that? Here's the story over at CNN, in case you missed the debate or the comment.