FDIC chairman Sheila Bair warned Thursday that the pace of loan modifications has been too slow thus far, and suggested that the mortgage industry needed to move more quickly to help troubled borrowers. In remarks delivered at the Bear Stearns Mortgage and Structured Product Conference in New York, Bair said that loan modification efforts have been "way behind the curve." "We must see a pickup in the pace, and the sooner the better," she said. Should foreclosures continue to rise, Bair warned that the voluntary program spearheaded by the HOPE NOW Alliance and backed by the Treasury Department may be replaced by more stringent measures. "Foreclosure rates may be a kind of barometer for what's ahead. Lawmakers at all levels of government -- local, state, and national -- will look to take additional action if foreclosures keep rising, and the economic fallout continues," Bair suggested. "This is the simple reality. Congress is already considering a number of proposals. "I very much believe in the market. But if market solutions fail to solve the problem, government will step in." The MBA, looking to blunt some of the criticism the industry has received as of late over a lack of transparency, released a wide-ranging report covering loan workouts in the third quarter of 2007 earlier on Thursday. The report found that 235,000 borrowers had been involved in either loan modifications or repayment plans, although repayment plans were by far the majority of all workouts. Bair also suggested that a lack of transparency in structured investment has "tarnished" Wall Street's global leadership in capital markets, and said that it may be neccessary to beef up disclosure requirements. "There was a general lack of reliable information to adequately assess the risks of the underlying assets for these securities," Bair said. "Many often failed to ask the most basic questions: What precisely are the risks? What kinds of underlying credits are these? What are the terms and conditions? What is the repayment capacity of the borrowers?" Bair also deflected criticism from the rating agencies, saying that "ratings must not be a proxy" for investor due diligence.