Carrie Bay | 11.17.08
The Federal Deposit Insurance Corporation (FDIC) proposed on Friday to spend $24 billion of the $700 billion bailout package to help 1.5 million households avoid foreclosure. This new plot is a mild deviation from the FDIC’s $40 billion incentive-based foreclosure plot place forth to Congress committee members in late October, under which the government would guarantee part of homeowners’ modified loans.
Under the new plot introduced last week, the FDIC would guarantee 2.2 million modified loans, or about half of the problem loans expected to accumulate between now and the end of 2009. Borrowers would get reduced interest rates, loan term extensions, or principal forbearance to make payments more affordable, and monthly payments wouldn’t total more than 31 percent of homeowners’ pretax monthly income. Loan servicers would be paid $1,000 for each loan they modify under the program, and taxpayers would absorb half of the loss if a borrower defaults on a modified mortgage.
DSNews.Com Default Servicing In Print and Online – Formerly REO Magazine
Tags: FDIC, real estate, mortgage, modification, loan, real estate, subprime, fed, bailout
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