Former FDIC chairman William M. Isaac.

William M. Isaac is managing director in the Vienna, Virginia, office of LECG LLC. Prior to joining LECG, he was chairman of the Secura Group LLC, also based in Vienna, Virginia, a financial institutions consulting firm, and its executive search affiliate, Secura Burnett Co.

Before founding Secura in 1986, Isaac served for nearly eight years as a member of the board of directors of the Federal Deposit Insurance Corporation (FDIC), and he was FDIC chairman from 1981 through 1985.

In that capacity, Isaac played a leading role in addressing many important issues concerning financial institution supervision and regulation that confronted the government, and structured some significant financial assistance transactions in the history of the FDIC. Isaac has also served as chairman of the Federal Financial Institutions Examination Council (FFIEC).

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Isaac, a frequent speaker before banking and other industry groups, currently serves as a member of the boards of directors of MPS Group Inc., Jacksonville, Florida; TransUnion Corporation, Chicago; and the Ohio State University Foundation, Columbus, as well as chairman-elect of Goodwill Industries of Sarasota, Florida.

Isaac received his undergraduate degree from Miami University, Oxford, Ohio, and is a graduate summa cum laude of the College of Law of Ohio State University, Columbus. In addition, he was awarded an honorary doctor of laws degree by Miami University in 1984.

Mortgage Banking recently interviewed Isaac about the subprime mortgage market outlook and about other financial market trends.

Q: How would you summarize the current state of the subprime mortgage market? Do you view this as just a market correction--albeit a painful one--or is the problem more significant?

A: I would view it as a painful market correction, but not terribly significant in the overall scheme.

Q: What is your outlook for subprime for the rest of 2007 and into 2008?

A: Well, credit is drying up for subprime borrowers, but standards are being raised. I believe that the market will come back once the adjustments are made.

Q: How much of a premium are subprime borrowers now having to pay as a result of the perceived mortgage market meltdown and other recent events?

A: I don't know how much of a premium they are paying. I think the biggest price they are paying is that they are not getting approved for loans that, in the past, they would have been approved for. I believe that people are moving more to higher quality.