From the story of Maribel Carillo and many others like her it will not be wide off the mark to say that IndyMac can be held up as an example for solving foreclosure related problems. IndyMac ran into losses forcing the government to take it over, Approximately 8% of the bank’s house mortgages numbering 742,000 were in the foreclosure zone.Maribel’s story has a happy ending that bank regulators would be interested in. This young lady lost her job wherein she earned $150,000 per year. Her husband’s construction job began to have the hiccups considering the foreclosure climate. Everything led up to the couple defaulting on their house loan for their ranch style house in Los Angeles having four bedrooms.
When three payments had been missed the Carillos found themselves owing IndyMac $9,800. Foreclosures were knocking at their door. But when Federal Deposit Insurance Corp. took over IndyMac a sea change in attitude of the lender took place. IndyMac agreed to modify the loan causing the monthly payment to drop to $1,600 from $3,000. The arrangement would continue for five years.
Under the stewardship of FDIC similar instructions have been given to nearly 4,000 borrowers. They have shifted on to more affordable loans. It is expected that in the immediate few weeks another 15,000 borrowers will benefit from these modifications. On an average each borrower will now have to pay $430 less per month.
The aim of the new administrators of IndyMac is to curb the losses stemming from reo homes. Its moves are being closely watched by all across the nation. The Bank of America has been prompted to take a similar stand after having recently acquired Countrywide Financial Corporation. This is part of a legal settlement amounting to $8.4 billion that has been reached in 12 states.
The Democrats in the Congress are now clamouring for a replay of the tactics of IndyMac in the Treasury Department to tackle the foreclosure problem.
Tom Miller the Attorney General of Iowa said, “The country is in crisis. This is something that everybody should do.”
With foreclosures continuing to run apace in states like California, Florida, Nevada and others it makes sense for the banks to avoid the path of foreclosure and opt for modifications. This way they will save themselves and the economy. Nationally the prices of houses have fallen by 18% from the peak it had reached during the middle of 2006.
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