Paul Solman: Has the administration done enough on loan modification? On helping the homeowner?
Sheila Bair: Well, I think they’re doing what they can do. They are looking, as we are now, as to whether more relief needs to be provided for folks who are having trouble with their mortgages because they’ve lost their jobs. When this started, it was the mortgage itself that was creating the problem – they were bad mortgages. They were unaffordable mortgages. So you could restructure them into an affordable product.
Now, if somebody loses their job, it’s much more difficult to fix that through loan modification. But providing some lower payments or suspension for some period of time is something, I think, we should pursue. We try to encourage that in the loan modification programs we [at the FDIC] have as part of our failed bank sales. I think the protocol that they use now, which is one we developed at IndyMac, is really focused on the affordability of the payment.
