FDIC restructuring many IndyMac Mortgages
Friday, August 22nd, 2008 | Link | Spread The Word!
After taking control of IndyMac in July and putting a temporary moratorium on foreclosures, the FDIC is attempting to set an industry example for large scale, systematized refinancing for troubled borrowers. Motivated by the fact that foreclosures are good for neither bank nor borrower, the FDIC is refinancing 25,000 mortgages formerly held by IndyMac with loans as low as 3%. This standardized approach to addressing borrower woes which can be quite varied is not without critics. Given that some of these mortgages are still likely to foreclose, there could be problems down the road with any potential buyers of IndyMac’s Assets. The FDIC appears to be eager to take some action after declaring the foreclosure ceasefire, which can’t last forever. It could be that lenders will appreciate some attempt at a solution that aims to reduce foreclosures. But given that the FDIC can’t even make the guarantee that they’ll attempt this with any future failed banks, it’s hard to imagine this plan will attract many speculators with big checkbooks.