Federal Deposit Insurance Corporation (FDIC) Chairperson Sheila Bair said that she hopes that IndyMac program will act as a catalyst to promote more loan modifications for troubled borrowers across the country.
Bair made the comment while testifying before the House Financial Services Committee on the home loan program in Washington D.C.
"The FDIC strongly supports programs that result in mortgage loans that are sustainable over the long term and avoid unnecessary foreclosures that harm individual borrowers and the economy," she said. "Prudent workout arrangements are in the long-term best interest of both the financial institution and the borrower."
Bair said the FDIC will continue the systematic program now in place at IndyMac Federal to convert troubled loans into performing loans and enhance the value of those assets.
On July 11, 2008, IndyMac Bank was placed into conservatorship by the FDIC. A bridge bank named IndyMac Federal Bank, FSB, was established to assume control of IndyMac Bank's assets and secured liabilities such as insured deposit accounts.
Upon the takeover of IndyMac Bank by the FDIC, it became the largest regulated thrift to fail.
By Steve Stecyk and edited by Stephen Huebl
©CEP News Ltd. 2008