Almost 6 weeks have passed since the Federal Deposit Insurance Corp, or FDIC took over IndyMac Bank. On Wednesday they announced that they are going to start working on some of IndyMac´s more troubled loans in order to help the borrowers keep their homes. They will start by sending out over 25,000 letters to those borrowers that are most delinquent on their loan payments. From there, they will work on modifying the loans: giving borrowers affordable payments that allow them to make regular payments, stay in their home, and cut down on investment loss in securities which are backed by said loans.

In order to qualify for loan modification, borrowers must show proof of income, that the home in question is their home of residence, and they would have to sign the letter sent by the FDIC and return it with the first payment due under the loan modification terms.

These new ¨affordable loans¨ will be those where the mortgage payment does not surpass 38% of the borrower´s income. The debt-to-income ratio can be regulated by reducing the loan interest owned, expanding the amount of time the loan can be paid back by, or by expanding the principal forbearance where payment is deferred on part of the original principal until the loan is refinanced or the home is sold. The interest rate made on this modified loans can not exceed the Freddie Mac survey rate for confirming loans, which to date is at 6.5%.

The Chairman of the FDIC, Sheila Bair, remarked on one of the reasons why preventing foreclosures is good for everyone, "Foreclosure is often a lengthy, costly and destructive process. Avoiding foreclosure not only strengthens local neighborhoods where foreclosures are already driving down property values, it makes good business sense,...This is a 'win-win' program all around."

The FDIC also hopes to promote IndyMac´s value to potential bank buyers and its assets. Blair said that, "By turning troubled loans into performing ones, we enhance their overall value,". This is good for any IndyMac customers who had uninsured deposits with the bank prior to its take over. Higher purchase prices mean less costs for the FDIC and their insurance fund. The FDIC took on almost $200 billion in IndyMac loans when they took it over.

Any borrowers who did not get a letter, can call (800) 781-7399 to see about qualification. For any who do not qualify, a FDIC representative would work with them to see about any other available alternative options.