According to the FDIC site: The pace of loan modifications continues to be extremely slow (around 4 percent of seriously delinquent loans each month).
Basic Structure of the Proposal
1. By paying servicers $1,000 to cover expenses for each loan modified according to the required standards
2. Sharing up to 50% of losses incurred if a modified loan should subsequently re-default
The FDIC says its plans should apply to an estimated 4.4 million loans that are likely to become delinquent though the end of next year. The FDIC expects the plan to apply to 4.4 million loans that are likely to become delinquent though the end of next year.
Fannie and Freddie have their own plans to help their borrowers and the banks, however slowly are beginning to step up. B of A will help renegotiate 400,000 loans and Citi is doing a similar work out program. The trend will take some time to show results because we have so many defaults and it will get worse this year because the credit crunch is beginning to show in terms of jobs. But i think we are beginning to get serious. The biggest risk to success are ineffective policies.
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