U.S. FDIC's Bair, former CFTC's Born honored

BOSTON, May 18 (Reuters) - The head of the U.S. Federal Deposit Insurance Corp said on Monday that the loan modification terms pushed through at failed U.S. mortgage lender IndyMac has become a template for other banks coping with homeowners who are over their heads in debt.

"We proved that systemic loan modifications could work, providing a template that other banks began to use and now really serves as a cornerstone of the president's national loan modification program," FDIC Chairman Sheila Bair said.

After the FDIC took over IndyMac in July last year, it oversaw a program that restructured loans for 13,000 homeowners, which Bair estimated saved the bank $45,000 per loan by avoiding foreclosure.

Bair spoke at the John F. Kennedy Library in Boston, which awarded her with a "Profiles in Courage" award, which honors the slain U.S. president.

The library also lauded Brooksley Born, former chair of the Commodity Futures Trading Commission, who had warned over a decade ago about the dangers posed by unregulated derivatives trading.

Born said on Monday the U.S. government needs to take advantage of the current economic crisis to develop a way to move trading of financial derivatives to regulated exchanges as much as possible and to more closely regulate those traded over the counter.

"It is now critically important to identify and eliminate these regulatory gaps and to strengthen our financial regulatory structure," Born said. "Without significant regulatory reform, our financial system will be exposed to continuing dangers and repeated crises."

The Obama administration last week said it planned to overhaul regulation of over-the-counter derivatives, including moving standardized trades onto regulate exchanges. (Reporting by Scott Malone; Editing by Tim Dobbyn)