Citigroup Bailout May Assist More Homeowners

But in Congressional testimony last week -- before the announcement of the Citigroup bailout -- Bair said that the FDIC's IndyMac plan allowed for the modification of loans, even in the face of investor contracts.

Kathleen Engel, a law professor at Cleveland-Marshall College of Law in Cleveland, Ohio, said that she hoped the FDIC's involvement in Citigroup would result in the modification of more securitized mortgages serviced by Citi.

The public, she said, could see "wide-scale loan modification on loans on which the banks hold an interest but don't own the whole loan."

"This is a new model," Engel added. "I've never seen this before where the FDIC's policies on loan modifications are being imposed on the bank as part of the bailout and I think it shows a lot of creativity on the part of the FDIC, the Treasury, the Federal Reserve and everyone involved in this deal."

Not everyone is as optimistic.

Len Blum, a managing director with the New York investment bank Westwood Capital, said he doubted that the FDIC would be successful in modifying Citigroup's securitized mortgages.

Obtaining the approval for the modifications from investors who own the mortgages, he said, "is harder than herding cats."