The Federal Deposit Insurance Corp. (FDIC) is reducing average monthly payments by $400 when it modifies troubled loans from IndyMac's portfolio, FDIC Chairman Sheila Bair said Wednesday in congressional testimony.

The IndyMac Bank receivership has already identified 7,400 loans that are eligible for loan modifications, and 1,200 of the homeowners have already accepted the offers, Bair told the House Financial Services Committee. The IndyMac modification program is targeted to borrowers in default who cannot afford to continue payments on their loans, many of which are adjustable-rate or hybrid loans that face resets.

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