KPCC News In Brief

FDIC offers more affordable mortgages to IndyMac customers

Troubled homeowners with IndyMac Bank loans may get a break from the Federal Deposit Insurance Corporation, the agency that assumed control of the bank last month. To reduce potential defaults, the FDIC is offering more affordable mortgages to IndyMac customers. Michael Krimminger is a special advisor to the federal agency. He told KPCC’s Patt Morrison that only certain customers qualify for the modified mortgage.

Michael Krimminger: “We are going to require verification of your income to establish that you qualify for the modification we’re provided. We don’t want to give someone a modification if they can’t afford that payment because that won’t do us any good, it won’t do the borrower any good. We also want to make sure that if someone who has much more income than they’ve identified, that they get a modification that fits their actual income.”

Joseph Mason, who teaches finance at Louisiana State University, wonders whether those borrowers can afford even a modified mortgage. He suggested that the bank insurer should do more to help borrowers.

Joseph Mason: “There are some community groups such as MACA out of Boston, which is a national group that helps with modifying loans. But they take the borrower and teach them a) how to budget, b) how to manage their finances, and then make them prove themselves in a modification arrangement test run before finalizing the modification.”

Link: Full Patt Morrison segment

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• August 21, 2008 4:50 PM
• Categories: Business/Economy