IndyMac Federal Bank has a new loan modification program to assist homeowners with their troubled home loan. The move by IndyMac should make a difference in helping to limit foreclosures from occurring with their customers. IndyMac Bank was a huge supplier of subprime and Alt A mortgages.
The Basics Of The IndyMac Loan Modification Program
Under the new IndyMac Federal Loan Modification Plan, an eligible mortgage can be modified into an affordable mortgage loan with interest rates at the current Freddie Mac Interest Rate for conforming mortgage loans. Modifications to mortgages are designed to achieve affordable mortgage payments at a 38% Debt To Income Ratio. Payments include principal, interest, taxes and insurance payments.
To get at risk and distressed homeowners who face foreclosure to affordable mortgage payments, loan modifications can combine a combination of interest rate reductions, principal forbearance and extended amortization periods.
- A loan can be extended from a 30 year term to a 40 year amortization period.
- Indymac Federal has several rate reduction options. One is a permanent rate reduction. Another is a stepped reduction which can reduce the rate for five more years. After the five year period, the interest rate would go up no more than 1% per year until is would be capped at the Freddie Mac mortgage rate. Once capped it would remain at this rate for the remaining period of the loan as a fixed rate mortgage.
- IndyMac can also reduce the amount a homeowner owes on their home to make monthly mortgage payments more affordable.
Any of these loan modification features can be used by themselves or combined to come up with an affordable payment for the homeowner and for what works best for IndyMac’s financial stability.The goal is to achieve mortgage sustainability that will allow more homeowners to stay in their home.
What Mortgages Are Eligible For The Indymac Loan Modification?
The Streamlined loan modification loans will be available to most homeowners who have a first mortgage that is owned or serviced by Indymac. A borrower must be seriously delinquent (more than 90 days past due) or in default to be eligible. Indymac will also seek to work with other homeowners who are unable to pay their mortgage due to payment resets on adjustable rate mortgages (ARM loans) or changes in borrower’s repayment ability (borrowers suffering from financial hardship and can prove it).
This streamlined approach will apply to mortgages for primary residences only. Second homes and investment property will not be eligible for the streamlined loan modification program.
How Do I Qualify For A Loan Modification?
As with all loan modifications, in general, homeowners facing past due mortgage accounts will have to demonstrate their financial hardship by documenting their income and a hardship letter. You may be required to show pay stubs, bank statements as well as two years of federal and state tax returns. If you do not have an income you may be out of luck. IndyMac wants to be sure that you can maintain the new mortgage payment that is agreed to.
How Do I Start With A Loan Modification With IndyMac?
Call IndyMac Bank directly at: 1-800-781-7399 to speak with a loan modification specialist.
For additional questions about your mortgage situation please complete the form below:
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