FDIC’s Bair Proposes ‘Global Solution’ to Foreclosure Mess

Editor’s Note: A good start, but without correction of the principal due to reflect reality, there is no major incentive for borrowers to do this. Eventually they will walk away.

FDIC’s Bair Proposes ‘Global Solution’ to Foreclosure Mess

By Peter Barnes

Published October 26, 2010 | FOXBusiness

One of the nation’s top bank regulators is proposing a “global solution” to the foreclosure paperwork mess that could include reducing monthly payments for struggling homeowners by 25% in mortgage modifications.

Sheila Bair, the chairman of the Federal Deposit Insurance Corporation, offered the proposal in a speech on Monday as a way to avoid lawsuits that might slow legitimate foreclosures.

“I fear that the litigation generated by this issue could ultimately be very damaging to our housing markets if it ends up unduly prolonging those foreclosures that are necessary and justified,” she told a housing conference in Washington, D.C.

Currently about a third of all home sold are foreclosed properties.

An aide to Bair said any “global solution” would require agreement from banks, mortgage investors and borrowers, as well as the 50 states Attorneys General who are investigating the paperwork scandal.

Under her proposal, banks would get legal protection from lawsuits in exchange for providing a struggling homeowner at least a 25% reduction in the monthly mortgage payment.

Bair said that in mortgage modifications the FDIC has been involved with that reduce monthly payments for homeowners by 10% to 40% cut “redefault” rates in half.

“We know from experience that reducing the monthly payment through modification raises the chance that the borrower will make good on the loan,” Bair said. “We also know that in too many instances, servicers have not made meaningful efforts to restructure loans for borrowers who have documented that they are in economic distress.”

Financial industry sources said the proposal would be difficult to implement – getting agreement among multiple parties would not be easy – and, with billions of dollars of souring mortgages involved, could be costly to banks.

A spokesman for the attorneys general declined to comment directly on Bair’s proposal.

But he said, “Our group of attorneys general and banking regulators is currently looking into the foreclosure problems that have come to light.  In addition to our active inquiries with servicers and lending institutions, we are engaged in extensive dialogue.  We will continue that dialogue with those inside and outside of our multistate group to ensure this process is both thorough and expeditious.  We intend to be fair to consumers, lenders, and investors, and continued input and dialogue will help us attain that objective.”

42 Responses

  1. Is Sheila Bair on medication? We the taxpayers were stuck with Trillions of dollars of TARP money for generations to come and she suggests a 25% reduction in payments? This just shows how the system works. One dollar for the taxpayer and $1500 for the politicians and their rich friends. This is corruption from the core. We have to tear down the house and start over again. They think we are all ignorant and they are the illuminated ones. Tell Sheila Bair to up her medication and keep her mouth shut. She insults me.

  2. I’ve been fighting my own foreclosure for almost 3 years now. When I first started I interviewed 20 Attorneys. None of which knew the first thing about loan securitization but all of which wanted money. I had to hit the books. I couldn’t work, there was no time. this is a way to difficult thing to do for that. So 25% off? You’re out of your freakin mind! The wrong company sued me, they did it with fraudulent paperwork that if I’d tried to do the same I’d be in jail. They’ll never get another dime out of me and on top of that, I WANT PAID! that’s right. Force me to stop working just so I have to spend 60 hour weeks researching UCC, FDCPA, TILA, HOEPA, RESPA… I can go on.. point is the Constitution gives me the right to persue happiness… I haven’t been able to for 3 years now. I’ve had to study “The Law!” Listen, I could have taken Law in college, I didn’t want to. I took things I was interested in and wanted to make a career of. You forced me to and now, as a whole lot of the law I’ve studied says… I’m entitled to be “made whole again” and I want to be made whole again! You’ve already blown the right to any monies you thought I owed you. The Govt paid you, AIG paid you and those derivative contracts paid you. You never even transferred my note into a trust! Not legally anyway. So you can just eat it!

  3. not a payment reduction, it is just another scam, principal reduction for underwater houses is the only thing that makes any sense, along with a mortgage refi that is fair.

  4. its the deadbeats i tell ya.
    ms blair & the rest of the empty talking heads will continue to deny – the entire mortgage industry has been a ruse since the 80’s, we were set up with the ploy of ” gold card has its privileges” & ” visa its everywhere you want to be”.
    From viable skilled working Entrepreneurs to low IQ dumbed down consumers as an occupation ,now what we have in the US iS occupation.
    It should be blatantly obvious by now this occupation will not end without bloodshed. If WE dont end it WHO WILL? our gov ? the Us GOV is the biggest money can buy & bought it is.These vampires will not just quit ,they require a stake thru the heart.
    It has been demonstrated that the greed & corruption is beyond repair.
    Kill the elephant in the room , quarter it up with a chainsaw & then burn the vile carcass on the White House lawn. WE must defend ourselves. The diplomacy of talking will only lead to more lies ,more double speak,more of THEIR legislation to rule against us….JUST AS IT HAS BEEN FOR THE LAST 50 years.

  5. Sheila C. Bair is just another typical member of her people, which resemble “parasites” sucking the blood out of America by the Gallons but not an ounce of dignity or integrity in ANY of THEM. For her people it’s their common way of life to live off the hard work, time, effort and labor of those who are not of the same origin as her people. They thrive on the pain and suffering of others who are not of their kind and spark up racial conflict between common Americans among different ethnicities anytime we set are differences aside and unite for a greater common good or conquering our common evil (THEM). They speak of peace, but they only seek to achieve it by means of destruction, war and forcing free Peoples into submission under the oppression of their iconic “Iron Fist”. They are cowards of the worst kind, not even considered human beings according to basic standards of decency, they murder unarmed civilians, women and children in mass just because their different. But one day the families and friends of those People as well as everyone who has suffered being subjected to their treacherous tyranny will have RETRIBUTION and they will pay for their Godless acts of inhumanity.


    Glad you are on our team. Now let’s address Sheila Bair – Why are you protecting those that belong in orange jump suits ? I agree with ANONYMOUS word for word and the sentence from Karen Pooley.

    That’s why I said, Ms. Bair, go to hell!

  8. Sounds like a bunch of hooey to me. Banks and servicers have become loan sharks and The New Mafia. Banksters anyone? Hell, man, you don’t even have to be a bank to fit into that category. The entire banking and judicial system is corrupt; I hope they all go down in flames. If they’re going to throw all of us into the pit of hell, let’s grab onto them and pull them down with us!

  9. Got many emails about Sheila Bair. Bair ALSO SAID – (paraphrase) that people should not go to court because they cannot pay a dramatically reduced mortgage anyway!!.

    Is that right Sheila?? Where is your proposal for principal reductions?? Why should borrowers still pay inflated loans on inflated home appraisals – all based on fraud? Even if you reduce the current payment – you are still demanding payment in full on the inflated and fraudulent loan. And, now you want to keep these people out of court??

    You were once an advocate for principal reductions, Sheila, what happened to you? They got to you too???

    Above quote from Shelia – “I fear that the litigation generated by this issue could ultimately be very damaging to our housing markets if it ends up unduly prolonging those foreclosures that are necessary and justified,”

    JUSTIFIED TO WHO – SHEILA?? The fraudsters?? You have got to be joking. The people will continue in court until justice is heard.

  10. Here in California Mers stated they are Nominee for New Century Mortgage in 2008 However new Century Mortgage sold all it loans and then filed BK in 2007. ASC/Wells Fargo stated to the BK court under Penulty of Perjury American Servicing company acquired servicing rights
    to my note and deed of trust 6/30/2006 Lie Lie Lie The house was not completed and my deed of trust was not printed until nov-14-2006. Also 6/30/2006 The house was stix in the builder name. They did not file a notice of completion until oct 2006.2009 Wells Fargo Attorney Foreclosure Mills Pite Duncon LLC in San Diego california submitted a proof of claim to the federal bk court in 2009 a OG copy of a note. The 2009 note was certified and had a bar code and a mers min number. However my original loan number was erased you could see the lines. The 2010 motion for relief from automatic stay The note did not have the Mers Min Number and no bar code not evan certified.We also notice they erase the min number and my OG loan number from my Deed Of Trust. This Is a Clear Case Of Fraud On The Courts.PLEASE CONTACT ME I WOULD LIKE MY

  11. Indict
    Shelia Bair,
    Timothy Geither,
    Henry Paulson,
    Ben Bernake, et al,
    and the top levels of banking Wall Street employees- NOW!

    NO DEAL to your criminal conspiracy to cover-up these crimes Bair.


  12. face it…when one buys a house…unless you pay it in full with your cash…you are a “glorified renter'”!

    you may put in a hefty down payment…but you still owe the monthly mortgage. so…it is like still paying rent.

    if unable to pay….instead of moving away and finding a new place to rent…one is stuck in foreclosure muck and the
    bank gets your downpayment and the house!!

    it very well be cheaper just to rent/lease

    and a lot less stressful…..

    if we did not have the mortgage interest deduction….almost not a good thing to buy

    of course, again…if you can buy your house and have it all free and clear to begin with…then by all means…that is best.

  13. 25% Reduction on what? Americans owe the banks and investors NOTHING. When they all accepted Bailout $$$ that was a De facto ratification of satisfaction and accord to all outstanding homeowner debt. But now for your subversive deceit and insidious oppression you are criminally liable for treachery and civilly liable in damages. Your treasonous acts will no longer be tolerated. You, the rest of your parasite puppet kin-folk and the freakshow clowns pulling your strings who claim to be our Constitutionally elected Republic can take your Circus act to a whole other continent. You and your kind (you know what I’m talkin about Bair) are a plague upon society and your very existence is an insult to humanity.

  14. Sheila, dny, Bill, Frankielee, Dahotruth, Linda, Fighter,
    Eule, Karen and Pooley, you ALL are so right. This is
    BS. Ms Bair is full of –it. We have fought long and hard
    to just give in because she “bair-ly” knows what she’s talking about. So to hell with her!

  15. For those who accept the 25% reduction. Just remember 44 people mysteriously died under the Clinton administration. Do not be surprised if millions mysteriously die
    under the Obama administration. In other words,
    “Do not drink the water or take any free flu shots because your children will never Inherit your home”.

    There is only one Fix. Make these S.O.Bs pay.

  16. My apologies if I posted in the wrong place. Needing to vent & provide info. Wanted to share some info. First of all, words can’t express how grateful I am to all of you homeowners who have rolled up your sleeves to fight for what is rightfully yours/ours. It use to feel like it was just me against the big bad banks (WAMU/CHASE). I quickly learned, I am/was not alone. They have literally tricked, lied, and scammed.
    To my benefit, I kept a papert trail & voice messages.

    My UD happened. My GREAT atty’s jumped right on it. The Sacramento County judge “glanced” at the paperwork, and said to our dismay, “denied”!
    Can continue this fight, but for what my attys need to do to present a solid case, payments plan won’t work, and there is simply not enough time to piece payments together. After all is said and done,
    we will be in worse financial shape, then before we purchased the home in 2005. Reluctantly moving on, but I was fighting to defend what was ours every step of the way. Looking for a 1-2 bed apt with kids.
    Anyone have a RV, they want to sell?
    Do you need a GREAT law firm that,”gets it”? I have one.
    Thanks for

  17. To all homeowners!
    Please check your backs to see if there is a sticker on it that says…”Stupid”

    It appears the government is feeling the pressure…everyone keep fighting this mess. STAND UP.

  18. He Lucy , I think you could wait ,until the Banks open there own Title Insurance , to get rit of the houses.

  19. Say bair indyac onewest FDIC and I get an acute onset of terretts

  20. A 25% reduction is an admission to guilt.
    No deal ! This still puts me $ 175,000 upside down and
    $ 170,000 out of pocket cash. These bastards should have thought of this 2 years ago before they deflated my neighborhood. I am not satisfied until I see these dirty S.O.B’s in an orange jump suit behind bars.

    I refuse to continue to pay for their crime.


  21. I’m with Karen.

  22. I don’t care how good of a deal the house is, I’ve learn my lesson, I will never buy another house again.


  23. No deal !!
    Our credit is ruined, and barely making enough to get by and whatever money is left goes to our lawyer to defend our foreclosure, and on top of that, property tax keeps going up.

    I want to see these clowns go to JAIL !!!
    fool me once shame on you, Fool me twice shame on me!!

  24. WOW! Lets see if I have this right ,now the FDIC wants to take another turn at legalizing the paper cause theeres really no other way out of this mess,and someone who used to work at Indymac bank is at the helm of the FDIC and she makes this suggestion?I mean isn’t it time they gave us some credit for having brains in our heads?Just another ploy in the already drawn out game that we are all playing.


  26. gretchen morguensen, from the new york times will be intwrviewed in NPR in a show called fresh air this afternoon

  27. Holy Crap! This is a ploy to strip away the legal rights that they have simply ignored up until now.

    “Global Solution”? Sounds more like the “Final Solution” for our constitutional rights.

    “litigation”. “damaging”?

    We’ve been raped of everything and left for dead.

    Come spend a day with me Sheila and I’ll show you the real damage of this fraud. Boarded up windows all over town, people living under overpasses.

    Can you say “Fucking elitist sell out bitch?” Reminds me of the woman at FOX who said “they could have rented.”

    Do you suppose that anywhere in her education she ever heard the phrase “Let them eat cake.”

    We cannot let them sweep this under the rug. Launch your litigation before they make it illegal.

  28. I don’t think Blair’s suggestion of just a 25% decrease in payment will be sufficient.

    There needs to be more.

    They should reappraise the homes (with 2 appraisals-one bank, one homeowners), reduce (wipe out) the principal loan amount due by 10% down to a 90% LTV of the averaged appraised value, and reamortize that value at a 2% interest rate on the mortgage, with interest only payments for the first 5 years. If the homeowner makes the next 5 yr pmts on time, then give them an additional 2% principal reduction at the end of 5 years and the loan then goes to fully amortizing.

    The mess started because the servicers wouldn’t/couldn’t modify without a homeonwer being delinquent–and then when those delinquent folks got modifications, it was at a lower rate than a person who made their pmts on time seeking a refi! What fairness is there in this program?

    The banks and the Feds caused this housing market mess. They purposefully rewarded lenders that foreclosed instead of negotiating mods and short sales and the banks didn’t care what the foreclosed homes sold for because they got “shared loss funds”. Make them pay back all that $ by putting it into a “homeowner help program” reducing everyone’s principal balance straight across the board by using the formula above (since they caused this mess).



  30. Go to hell, Ms. Bair.

  31. Question on Sheila : Which lender would talk to me :
    BNC = out of business , sold to OPTION ONE =
    out of business , sold to ? AHMSI or CHASE , I have to sue Trans Union , because I have now
    2 Mortgages and the will not take it out , even the
    Florida state Attorney wrote , the should do it.
    My promissory note ? where ? have to sue too.

  32. that sounds like a PAYOFF!

    FDIC is proposing a bride of sorts to buy off some property owners… that would never fight anyway. As we all know 96% of foreclosures close with out a fight by property owners.

    This also sounds like the Fannie Mae program. Fannie knew thay had issues with not owning the note/lack of standing, so Fannie thought they would get as many of the loans/properties off the books as possible and encourage exhausted property owners, that have spent months and years in loan mods and short sales with big banks; Fannie was offering $3,000 cash and forgive the debt for deeds-in-lieu and short sales to get folks out of the way.

    WHAT GOOD IS A REDUCTION OF PAYMENT ON A PROPERTY that is $400,000 underwater. The lender wants property owners to give up all there rights!

    They are drinking the Kool-Aid

  33. We are not taking it anymore! Sheila, I thought you were good at what you did, but I guess not. No more fraud coverup. We need to go for the jugular and take the mega banks out. They need to be afraid of us–very afraid. I know lots of people think that being reasonable will work with the banks. It will not! They will be screwing you again in no time. The system of banking here in the U.S. with mega banks has to go. From what I am seeing, the Europeans are not real happy with our mega banks either. Let’s hope they keep up the pressure. Pls check out: http://www.ChallengingForeclosure.com 864-241-8602 Burmese8@yahoo.com.

  34. Does she really think there are “legitimate foreclosures” ?
    With all the faulty paperwork and lack of standing?

    Typical federal BS. Make the banks immune from legal actions and cover up the mess by distracting us with “lower payments”… re-contracting to this nightmare.
    Take away our rights to sue? To seek justice?

    The homeowner’s choice is to eat what they dish out or walk.
    No recourse.

    Just push us further into socialistic slavery, why don’t you?
    More “Global,” One-World crap.

  35. Please not ANOTHER modification scam…endorsed by the Government

  36. BoA, You want my house so bad come and get it! The last time I talked with them they wanted to know why I was’nt eating dog food and paying them more. YOUR NOT STRUGGLING ENOUGH they said. I almost went down there I was so mad.

  37. 25% reduction upon a 100% problem. BS!

    Sheila Bair is a BIG crucial part of this government cover-up.

    Avoiding even the bigger moral hazard demands – Let the banks pay for their wrongdoings and corruptions of our courts for the last two long years. They have repeatedly lied to and about us in pleadings, and bankrupted half of us.

    No deal. No cover-up Sheila Bair. You sellout.

    Full anal audit of this country’s fraudulent books, NOW! My credit is already ruined….. Your turn!

  38. This is exactly how third world nations are formed.

    One bank sold my mortgage twice, to different entities. That is a legal impossibility. As Karl Denninger writes, only prostitutes can sell the same thing over and over again.

    Now Sheila wants to make it right with a free pass. Bankers, you are now free to commit fraud legally. It’s the law.

    Don’t blame Sheila. She’s just trying desperately to protect a system that’s reached critical mass, and threatens the existence of the GSE business model. It can’t continue without rampant fraud, so they need to legitimize the fraud, at any cost. And we, the citizens, are the least costly commodity in this model. Obama’s henchmen, or women, will sacrifice us all, to save Wall street. Get under the bus people.

  39. OMG you got to be kidding me. As if it’s that simply. How about this…take this house and give me back my 780 credit rating back that I had before I had to start living on credit cards and I’ll buy a better home for much less.

  40. For the millionth time Sheila, this is about FRAUD! DEAL WITH IT!!!! You can’t negotiate away my right to due process and my right to sue!

  41. Smells like another “Great Sellout.”

    Shame on FDIC Chairman Sheila Bair (who must know better) for even suggesting that the state’s Attorneys General “wrap up” their own investigations based on the FDIC’s proposed one-sided “Global Solution.” WTF! She suggests the need for “Legal protection from lawsuits” for banks as a way to address states’ Attorneys General’s concerns for “due process” for defrauded borrowers?!?!?!

  42. Shelia,

    Now that many have been damaged, it is too late to make this global back room deal. This is pitiful. Remember she had a mortgage from one of these banks that hit the newswires before.

    Shelia was at the helm of Indymac Federal Bank FSB when many were offered modifications only to have them rejected in April 2009 when Onewest got their sweet heart deal.

    The banks need to be smacked.

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