Clare D. Rowley

Much to her amazement, 25-year-old Clare Rowley found herself sitting side-by-side with high-powered bankers, federal regulators and top Obama administration officials during a Treasury Department brainstorming session in February on how to stem the national mortgage foreclosure crisis.

One of the few women and certainly the youngest at the meeting, the junior analyst from the Federal Deposit Insurance Corp. was hesitant to interject herself into the rapid-fire discussion. “I was a little intimidated at first,” she recalled.

But when participants began putting together the details of the nationwide plan to keep people in their homes, Rowley spoke up and described what she had learned in helping to implement the FDIC’s loan modification program in 2008 at the failed IndyMac Bank in California.

“Some heads nodded suggesting I had made a good point, and that it was right to think beyond rigid formulas,” recalled Rowley. “That positive feedback really broke the ice for me.”

The Treasury meeting was one of many extraordinary moments for a young government worker who has been providing guidance to federal policymakers on the mortgage crisis that helped precipitate the worst financial crisis since the Great Depression.

“Clare was absolutely central to the process of getting the Treasury’s loan mortgage modification program off the ground,” said Richard Brown, the FDIC’s chief economist.

“Clare took her expertise and brought it to this group and played a leading role in the effort to get all the operational details wrapped up,” he said. “You have someone at a fairly junior level that stood up, took a leadership role and earned the confidence and trust of high-level counterparts at these agencies.”

Rowley began work at the FDIC as an economic assistant in 2005 after graduating from The George Washington University with a degree in economics, and was assigned the task of designing and managing a complex national database of subprime mortgages. At the time, the subprime issue was not on the radar screen of most federal policymakers.

Christopher Newbury, one of Rowley’s supervisors, said her review of the data informed FDIC Chairman Sheila Bair about the growing subprime mortgage problem and provided support for Bair’s call for government intervention.

“By the fall of 2007, Clare was the person in the FDIC most responsible for in-depth analysis of loan data, crunching numbers to assess the risk. Her analysis was critical for determining what that meant for the FDIC and the country,” said Newbury. “It is fair to say that without her skillful analysis of the loan data, the FDIC would not have been as effective in the subsequent policy debate.”

The FDIC, an independent agency, was created by Congress to maintain the stability and public confidence in the nation’s financial system by insuring deposits, examining and supervising financial institutions, and by taking over and managing failed banks.

When the FDIC took control of the failing IndyMac Bank in the summer of 2008, Rowley was dispatched to California with colleagues to implement a systematic plan to help struggling mortgage holders stay in their homes.

The program involved instituting entirely new financial formulas, retraining loan servicers, contacting thousands of mortgage holders more than 60 days in arrears, and then working out specific loan modification agreements that would head off almost certain foreclosures. These agreements involved lowering interest rates, extending the length of the mortgage or deferring the payment of principal to make the loans affordable.

“They were inventing a new program from scratch and she was trouble-shooting and making it work,” said Brown, the FDIC economist. “There were more than 12,000 loan modifications during our seven months as the conservator. Clare was very involved at the nuts and bolts level all the way through at IndyMac.”

Taking over IndyMac allowed the FDIC to put a streamlined mortgage financing system into practice unlike anything ever previously done. By spring of 2009, about 88 percent of the IndyMac modified loans were still in force.

When the Obama administration announced early in 2009 that it would move forward with a $75 billion national mortgage loan modification program to keep nine million people in their homes, the FDIC enlisted Rowley to help work out the details and offer practical advice on how it would work based on the IndyMac experience.

“Clare impacted what we did at IndyMac in a major way and she had a major impact on policy discussions at Treasury on the final details of the President’s loan modification program,” said Michael Krimminger, a special policy adviser at the FDIC. “She has helped Americans stay in their homes by working to create and support a policy that led to thousands of loan modifications at IndyMac and hopefully millions of modifications across the country.”

This medalist was the recipient of the Call to Service Medal, which was updated to the Emerging Leaders Medal in 2020.