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Loan modification 

 

This page is a consolidated look at the loan modification proposals and programs. These were put forth by the FDIC and federal government since May 2008. The links have comprehensive information on each program.

Homeowner Affordability and Stability Plan
The Homeowner Affordability and Stability Plan, a $75 billion dollar federal program, provides for a sweeping loan modification program. It is targeted at borrowers who are at risk of foreclosure because their incomes are not sufficient to make their mortgage payments. It also includes refinancing opportunities for borrowers who are current on their mortgage payments. They have been unable to refinance because their homes have decreased in value.

FDIC Loss Sharing Proposal to Promote Affordable Loan Modifications
The comprehensive proposal by the FDIC for a systematic and sustainable process for loan modifications. This is based on the program initiated at IndyMac Federal Bank to reduce first lien mortgage payments. Taken to as low as 31% of monthly income. Modifications are based on interest rate reductions, extension of term, and principal forbearance. This program includes the tools found on the Loan Modification Program Guide – FDIC's "Mod in a Box".

Home Ownership Preservation Loans
The FDIC proposal in May 2008, that Congress authorizes the Treasury Department to make loans to borrowers with unaffordable mortgages. This was to pay down up to 20 percent of their principal. This approach is scaleable, administratively simple, and will avoid unnecessary foreclosures. This was to help stabilize mortgage and housing prices.