PSA: Inside the Agency, Outside the Box at FDIC
Another in Understanding Government’s series “Public Service Announcement” profiling the careers and challenges of notable government employees
By Norman Kelley
At the epicenter of last year’s economic meltdown, along with the disappearance of major financial firms, was the collapse of IndyMac Federal Bank, a California-based institution that found itself overwhelmed with distressed mortgages. A result of the nation’s toxic housing bubble (and an at-sleep-at-the-wheel regulatory infrastructure), IndyMac was emblematic of the country’s national mortgage foreclosure crisis. FDIC economist Clare Rowley was in the eye of Indy Mac’s particular hurricane, trying to rectify that bank’s troubled assets and find ways to save homeowners with IndyMac mortgages from foreclosure.
Clare Rowley
In July 2008, along with other FDIC colleagues, Rowley was dispatched to Pasadena, California, site of IndyMac’s home office. There she helped implement a mortgage modification program that allowed qualified but struggling mortgage holders to stay in their homes. The FDIC’s modification program, which some called a “Model in a Box,” consisted of three basic parts: lowering interest rates, extending loan terms, and principal forbearance. The model worked: by the spring of 2009, 88 % of modified loans were still in force.
When the new Obama administration began tackling the mortgage crisis in mid-2009, (more…)
