The Federal Deposit Insurance Corp. will announce details Wednesday of loan modification plans for borrowers of failed IndyMac Bancorp, the agency said late Tuesday.
The FDIC, long an advocate for lenders carrying out loan modifications, has tried to follow its own advice after taking over the $32 billion-asset California thrift last month. Shortly after the agency was named conservator of the institution — newly chartered as IndyMac Federal Bank — FDIC Chairman Sheila Bair announced a halt to foreclosures on the $15 billion in mortgages IndyMac still owned.
Last week, FDIC chief operating officer John Bovenzi, who was appointed the chief executive of Indymac Federal, said officials would consider modifications on both loans owned by the institution and those only serviced by IndyMac — but owned elsewhere. At the time of its failure, IndyMac's servicing portfolio included 740,000 loans — both on-balance sheet and securitized — worth $184 billion.
In a press release Tuesday evening, the agency said it would unveil details in a conference call Wednesday "of a streamlined loan modification plan for troubled borrowers" at the failed thrift.
IndyMac, hampered by a portfolio concentrated in low-value alternative-A mortgages, failed on July 11. It was the second-largest failure ever, and the largest for a thrift.
The modification process will likely impact how costly IndyMac's resolution turns out to be. The agency plans to sell off the thrift and its assets to one or multiple buyers, and the status of its loans will help determine how much the agency gains from such a sale.
The FDIC has estimated that the thrift's resolution will cost the Deposit Insurance Fund between $4 billion and $8 billion.
