According to an article written by Jay Mallin of Bloomberg News, FDIC chairwoman Sheila Bair could have a defined role with Obama administration because of her foreclosure prevention efforts.  Bair continues to push the limits with expanded loan modification programs to prevent foreclosure for distressed homeowners across the country.  Her recent proposal for additional mortgage relief aid puts her at odds with the Bush administration, yet the timing could be right for the next regime that continues to promote change with loan modifications and home loan reform.  Sheila Bair, chairwoman of the Federal Deposit Insurance Corp remains one of the few government officials whose reputation and image may have has been improved during the subprime mortgage meltdown and foreclosure crisis.  The republican woman offers a full arsenal as an author of children’s books, FDIC chairwoman who has aggressively pursued and rallied for the U.S. government to expand their scope and reach out with progressive mortgage restructuring to ease the pain for the millions of struggling homeowners.  According to Mallin she is even winning praise from Democrats who appreciate her non partisan approach to fighting off foreclosure and improving predatory lending laws.

As the Bush administration gallops off into the sunset, she becomes more vocal with a strong advocating for her foreclosure and mortgage relief plan that certainly could help promote the non partisan message that President Elect, Barack Obama looks to install. Bair may just have earned herself a leading role for this new administration.  Just last week she took several more steps that suggest she is on a mission as she publicly criticized the highly touted foreclosure prevention plan that Paulson’s Treasury Department and other agencies were bragging about. She pointed out the loan modification plans deficiencies that she believes fall short of what American homeowners need.  On Friday, Bair released details of better mortgage loan modification plan that require a $24.4-billion injection.  Her program aims to prevent 1.5 million foreclosures — even though Treasury Secretary Henry M. Paulson had told reporters earlier in the week that he had changed his mind and that they would not pay bad mortgage loans. 

“Sheila’s very ambitious, and I think she’s looking for a job promotion in the Obama administration,” said Bert Ely, a banking industry consultant. “Even though she’s a Republican, she’s much more in tune with the Democrats.”Bair’s Republican registration and her Democratic leanings on handling the mortgage crisis could make her an appealing choice for Obama, analysts said. She has been mentioned as a dark-horse candidate for Treasury secretary, having served as assistant secretary for financial institutions in 2001 and 2002. She has also been thought of as a mortgage czar to oversee the various government efforts to stem foreclosures, should Obama create such a position.  “I wouldn’t mind seeing her as Treasury secretary,” said Dean Baker, co-director of the Center for Economic and Policy Research, a liberal Washington think tank. He said Obama would be “foolish” not to find a place for Bair in his administration considering her performance during the financial crisis.  Bush appointed Bair, 54, to a five-year term as chairwoman of the FDIC in 2006. It is an independent agency, similar to the Federal Reserve, so Bair does not have to step down with the change of administration. Her term on the FDIC board extends even longer, until 2013.   But Bair would heed the desire of the new president, said FDIC spokesman Andrew Gray.  “She has said she believes any incoming president should have the power to choose their own economic team. She would respect any decisions made by the president-elect,” Gray said, adding that would include stepping down as FDIC chief or serving in a different capacity.  “She would be open to his decisions on where he may think she can be best utilized,” Gray said.

The FDIC was created during the Great Depression to provide government-backed insurance for bank deposits. But its boss usually works in obscurity, except during severe financial turmoil.  Bair has taken the job to a new level. She was one of the first government officials to recognize the problems of subprime loans. At a conference in October 2007, she told investors: “More needs to be done, and done sooner rather than later,” to restructure mortgages and modify mortgage loans for troubled homeowners.

She took a prominent role in the Bush administration’s response this fall, including successfully pressing for a significant expansion of deposit insurance.  Bair has also made reducing foreclosures one of her priorities. After the FDIC took over failed IndyMac Bank of Pasadena in July, the agency developed a plan to reach out to struggling homeowners and make their mortgage loans more affordable. Consumer advocates marched in accordingly with praise for Bair’s foreclosure prevention efforts.  The homeowners relief plan, which has had mixed results, is the basis for Bair’s $24.4-billion proposal to have the government cover as much as 50% of the losses on modified mortgage loans in hopes of persuading lenders to restructure them. 

Bair’s work has drawn praise from many congressional Democrats. Last month, House Financial Services panel Chairman Barney Frank (D-Mass.) and Rep. Maxine Waters (D-Los Angeles) wrote to Bush urging him to have Bair head a government-wide effort to coordinate operations to help homeowners.  Bush has not created such a position. And his administration has been cool to Bair’s mortgage restructuring plan because it calls for additional spending. Last week, federal officials announced a less ambitious plan to modify several hundred thousand holders of mortgage loans owned or guaranteed by government-run Fannie Mae and Freddie Mac.  But Bair publicly criticized the plan. Then on Friday she formally rolled out her own proposal, even though the administration had said it would not fund it. Gray said the move was designed to give lawmakers and others specifics so they could decide whether the foreclosure prevention plan was worth enacting. “I think she and her staff are more focused on where the Democrats are on this than where the Republicans are,” Ely said. That could pave the way for a new job for Bair after Jan. 20.  “I wouldn’t be surprised if the Obama administration [creates] a mortgage modification czar,” Ely said. “Or in this case, a mortgage modification czarina.”

According to San Diego’s 10 News, People’s First Financial has some satisfied customers and unhappy homeowners seeking a modification for a reduced rate home loan.  The 10News I-Team started taking a closer look at how this Mira Mesa company works after getting complaints from customers.  Lina Lopez is a mother of three whose husband and father was laid off from work. The I-Team went to Apple Valley to talk to her and another concerned client, Mark Walker.  Lopez says she paid $2,500 to People’s First Financial after being made a promise.  “She said, ‘We can help you lower your payments,’” says Lopez. “They were so easy to get a hold of but once they got my last payment, I got voicemails.”  Lopez says the company couldn’t help her, and when she tried to get her money back she was denied.

A similar thing happened to Mark Walker after he paid $1,500 to the loan company after he claims he was promised to get better interest rates.  He says he agreed to the modification agreement because the company promised to refund his money they were unable to modify his mortgage. He claims the sales associate informed him the company would also reduce their principal amount while getting a lower mortgage rate.  “We sent them the information they wanted, but we never back from them,” says Walker.  That’s no surprise, if you ask Jay Nichols. Nichols was Walker’s sales representative and left the company after five months.  “I was there and didn’t feel comfortable letting people go into foreclosure and not giving them their money back. If we fail, we fail, give the money back. The managers did not feel that way and I didn’t want to be a part of it,” Nichols says.  He explains the sales reps have nothing to do with the negotiating process. Their job is to get people in the door. From there, the client’s files go to a group of negotiators that work with the lenders to lower their monthly payments. Nichols says if the company can’t, it’s supposed to refund the customers money.  “What we’re selling them on the phone is we’ll help you save your home, you’ll pay us a lot of money to do that. If we can’t do that we will give you your money back,” Nichols says.  He quit after a few of his clients did not receive the refund they were promised.  “I sold the person on believing in the company and I didn’t know that it wasn’t going to happen,” he says.

When the I-Team went to get answers, Trevor Hutchison explained they never make promises to customers. He tells the I-Team they have many satisfied customers, and they charge people to “research and analyze” their situation.  “We look for solutions for them,” Trever Hutchison says. “They sign up with us for research and analysis to analyze what situation is, so we can poke and prod lender in the right direction or provide them with a refinance.”  He says people expect immediate results, but the process can take up to 120 days. 

Court records show the company has been sued by dissatisfied customers previously.  > For more information about a California Loan Modification Company, make sure you work with a foreclosure prevention company that provides at least a partial refund if the modification is not accepted by the lender and working with a foreclosure lawyer is suggested in case you need representation in court.  California homeowners need to be aware that the loan modification process is time consuming and can be confusing with quickly evolving foreclosure laws.  Loan modifications and legally negotiated mortgage terms do take time, so it is imperative that you choose a loan modification company that has the ability and willingness to work in the best interest of you the homeowner.