Indy-Mac fast track Loan Modification Program will it help prevent foreclosure

The streamlined loan modifications will be available for most borrowers

The loan modification is in position to help those who have a first mortgage owned or securitized and serviced by IndyMac Federal where the borrower is seriously delinquent or in default.

As many are aware 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. It is important to take note that 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.

Will Bond Holders be Affected?

According to a recent report from Barclays Capital. The FDIC indymac loan modification plan could have a widespread impact on bond holders.

How the Indy Mac Loan Modification program is designed to achieve affordable and sustainable mortgage payments for borrowers

How the process is done is by increasing the value of distressed mortgages by rehabilitating them into performing loans, the new program will help IndyMac Federal improve its mortgage portfolio and servicing by modifying troubled mortgages, where appropriate, into performing mortgages.

Some of the modifications being offered include:

• interest rate reductions to no higher than the Freddie Mac survey rate for conforming mortgages
• extended amortization, and principal forgiveness aimed at achieving the 38% front DTI aid
• focus on actively modifying loans for delinquent and severely delinquent borrowers
• employing affordability modifications, this will allow the FDIC to write down loans to levels the borrower can afford

It has been noted that borrowers with various Alt-A loan products can receive affordable mortgages that would reduce their payment load down to a 38 percent debt-to-income ratio, including principal, interest, taxes and insurance.

Homeowners Mortgage Bail out with Indy Mac Loan Modification Program

Solutions in place to help bail out homeowners facing foreclosure, by quickly renegotiating loans, in order to limit foreclosure, can it work?

IndyMac services several types of mortgages such as Alt-A, prime, and subprime and fixed, hybrid ARM, and option ARM, the FDIC announced a plan systematically modify seriously delinquent mortgages that are owned or secularized and serviced by IndyMac

Federal this plan applies to first lien mortgages on the borrower's primary residence and is aimed at limiting the borrower's mortgage debt-to-income (DTI)ratio to 38% based on documented income.

How IndyMac Federal determines whether a modification proposal is affordable

It is calculated and based on income information received from the borrower and these modifications would be designed to achieve sustainable payments at a percentof the (DTI) ratio of principal, interest, taxes and insurance in order to reach this metric for affordable payments.

Help is provided once a borrower has provided financial information to an IndyMac Federal customer service representative, IndyMac Federal will evaluate whether a loan modification may be available and, if so, provide a proposed offer to the borrower by mail.

Get more information,visit the FDIC website:FAQ on IndyMac/FDIC loan modification program