PRESS RELEASE
Federal Deposit Insurance Corporation
FOR IMMEDIATE RELEASE
December 6, 2007
Media Contact:
Andrew Gray (202) 898-7192
angray@fdic.gov
Congress created the Federal Deposit Insurance Corporation in 1933 to restore public confidence in the nation's
banking system. It promotes the safety and soundness of these institutions by identifying, monitoring and addressing
risks to which they are exposed. The FDIC receives no federal tax dollars — insured financial institutions fund its
operations.
FDIC press releases and other information are available on the Internet at www.fdic.gov, by subscription electronically
(go to www.fdic.gov/about/subscriptions/index.html) and may also be obtained through the FDIC's Public Information
Center (877-275-3342 or 703-562-2200). PR-101-2007
Statement of FDIC Chairman Bair on Loan Modification Plan
Federal Deposit Insurance Corporation Chairman Sheila C. Bair today made the
following statement at a press conference announcing an industry led plan to help
certain subprime homeowners with unaffordable reset payments avoid foreclosure:
"While I have not had an opportunity to review the details of the agreement
reached today, I understand that it fulfills the principles that we have advocated
to prevent unnecessary foreclosures. Most importantly, as I understand the
agreement, it is a commitment by the industry to implement a stream-lined
process to extend the starter rates on subprime ARMs for 5 years or longer for
subprime borrowers who have been current on their loans, but can't refinance or
make the higher payments after reset."
"This is an important initial step and I commend Secretary Paulson for his
advocacy on behalf of systematic loan modifications. I applaud Secretary
Paulson's vision in recognizing that we are in a virtually unprecedented credit
environment and that difficult choices have to be made. In particular, I want to
thank the President for his personal interest and support for this initiative."
"Homeowners benefit by extending their fixed starter rate for a minimum of five
years. In many cases, it will make sense to extend the modification for a longer
period and that is allowed by today's agreement. Investors benefit by receiving a
steady stream of income rather than incurring the greater losses from foreclosing
on a home. Communities and neighborhoods benefit by allowing people to
maintain stakes and a vested interest in the areas where they live."
"Accountability also is critical. The plan includes an effective system to measure
the progress in making loan modifications."
Federal Deposit Insurance Corporation
FOR IMMEDIATE RELEASE
December 6, 2007
Media Contact:
Andrew Gray (202) 898-7192
angray@fdic.gov
Congress created the Federal Deposit Insurance Corporation in 1933 to restore public confidence in the nation's
banking system. It promotes the safety and soundness of these institutions by identifying, monitoring and addressing
risks to which they are exposed. The FDIC receives no federal tax dollars — insured financial institutions fund its
operations.
FDIC press releases and other information are available on the Internet at www.fdic.gov, by subscription electronically
(go to www.fdic.gov/about/subscriptions/index.html) and may also be obtained through the FDIC's Public Information
Center (877-275-3342 or 703-562-2200). PR-101-2007
Statement of FDIC Chairman Bair on Loan Modification Plan
Federal Deposit Insurance Corporation Chairman Sheila C. Bair today made the
following statement at a press conference announcing an industry led plan to help
certain subprime homeowners with unaffordable reset payments avoid foreclosure:
"While I have not had an opportunity to review the details of the agreement
reached today, I understand that it fulfills the principles that we have advocated
to prevent unnecessary foreclosures. Most importantly, as I understand the
agreement, it is a commitment by the industry to implement a stream-lined
process to extend the starter rates on subprime ARMs for 5 years or longer for
subprime borrowers who have been current on their loans, but can't refinance or
make the higher payments after reset."
"This is an important initial step and I commend Secretary Paulson for his
advocacy on behalf of systematic loan modifications. I applaud Secretary
Paulson's vision in recognizing that we are in a virtually unprecedented credit
environment and that difficult choices have to be made. In particular, I want to
thank the President for his personal interest and support for this initiative."
"Homeowners benefit by extending their fixed starter rate for a minimum of five
years. In many cases, it will make sense to extend the modification for a longer
period and that is allowed by today's agreement. Investors benefit by receiving a
steady stream of income rather than incurring the greater losses from foreclosing
on a home. Communities and neighborhoods benefit by allowing people to
maintain stakes and a vested interest in the areas where they live."
"Accountability also is critical. The plan includes an effective system to measure
the progress in making loan modifications."
"I understand that this agreement will continue to be enhanced and refined as we
obtain more information about the pace and structure of loan modifications. I look
forward to seeing these reports and the level of fast track modifications under this
agreement."
"The bottom line is that consumers who are making their payments on time will
be able to afford to keep their homes. If these homeowners do not have the
ability to refinance or make their higher payments after resets, then they will
qualify for a loan modification. The FDIC is committed to finding solutions that
help homeowners continue to live the American Dream."
Attachment:
http://www.fdic.gov/news/news/speeches/archives/2007/chairman/spdec0607.html
obtain more information about the pace and structure of loan modifications. I look
forward to seeing these reports and the level of fast track modifications under this
agreement."
"The bottom line is that consumers who are making their payments on time will
be able to afford to keep their homes. If these homeowners do not have the
ability to refinance or make their higher payments after resets, then they will
qualify for a loan modification. The FDIC is committed to finding solutions that
help homeowners continue to live the American Dream."
Attachment:
http://www.fdic.gov/news/news/speeches/archives/2007/chairman/spdec0607.html