Considering all the heat FDIC Chair Sheila Bair got during her campaign for loan mods and the program she implemented at IndyMac Bank, I found this article interesting. I guess the “proof is in the pudding” now.
Housing Wire: IndyMac Modification Outperform Industry Redefault Standards
As of May 31, 2009 the redefault rate among modified IndyMac Federal Bank (IndyMac) loans was 15.6%. The bulk of these modifications took place in Q408 — as early as September 2008, according to FDIC spokesperson David Barr — indicating many of these loans are at least six months past modification.
The FDIC rate is well below the industry standard six-month redefault rate, which ranges from 30% to more than 40%.
I wonder what an updated report from OCC Comptroller John Dugan would look like now?
About Bill Rice
I think it's too early to tell on the re-defaults…the Indymac success rate may be better because they're actually holding the mods to a higher level. Many other banks and lenders are simply offering repayment plans or loan workouts that either keep payments the same or actually INCREASE them…so it could be a matter of checks and balances to ensure borrowers receive something beneficial.