Yesterday, Congress grilled the Big Three - not the Big Three automakers, but the Big Three players in the financial rescue plan: Treasury Secretary Hank Paulson, Fed Chairman Ben Bernanke and FDIC Chairwoman Sheila Bair.
While Paulson's testimony regarding the changes to the TARP program was received as well as a fart in church, Sheila Bair stole the show with her remarkable success story with the FDIC's proactive loan modification program put in place in the IndyMac Bank resolution.
While Paulson has stubbornly refused to actively participate in direct help to homeowners, either through loan modifications or debt forgiveness through the TARP program, Bair has directed the FDIC to take an active role. Paulson feels that Treasury's sponsorship of voluntary programs like the Hope Now Alliance (a dud), is sufficient.
Bair has broken from the administration and created a model to proactively (that is when the Bank calls you to start the process) modify thousands of mortgages that became the property of the FDIC when they took over IndyMac Bank earlier this year. Her model combines interest-rate reductions and principal forgiveness in order to keep homeowners from foreclosure.
The IndyMac model is simple and it is working. It is directly helping homeowners while not costing the government billions of dollars. I say Go Sheila, Go!
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1 comment:
If the rest of the investors would take the same aproach as Sheila, we would get out of this mess in half the time!
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