Mortgage plan set for IndyMac borrowers
Posted on Thursday, August 21, 2008
WASHINGTON — Troubled home borrowers with loans from IndyMac Federal Bank can switch to fixed-rate mortgages under a new plan from federal regulators, who seized the bank last month after it became the largest regulated savings and loan to fail.
Most IndyMac borrowers who are seriously delinquent or in default on their mortgages and can document their situation can switch into loans capped at an interest rate around 6. 5 percent, the Federal Deposit Insurance Corp. announced Wednesday.
The agency has been operating the Pasadena, Calif.-based bank, which was called IndyMac Bank, under a conservatorship since July 11.
The plan applies to troubled mortgages with higher interestrate resets, mainly in the category of so-called Alt-A loans, which traditionally were made to borrowers with solid credit but little proof of their incomes or with small or no down payments.
The FDIC temporarily froze all mortgage foreclosures for IndyMac borrowers when it took over the bank. It said Wednesday that there will be no fees for the loan modifications and all unpaid late charges will be waived. Thousands of delinquent borrowers will receive proposed offers for modifications in the coming weeks, based on current income information they provided, the FDIC stated.
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