Saturday, July 12, 2008

Ouch!! That’s Gotta Hurt

Key US mortgage lender goes bust

One of the largest US mortgage lenders, the California-based IndyMac Bank, has collapsed amid a growing credit crisis.

Posted by renting2 @ 07:41 AM (1774 views)
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12 thoughts on “Ouch!! That’s Gotta Hurt

  • Update – 2008-07-11: (End of day – 3:57 pm PDT) “On, Friday, July 11, 2008, IndyMac Bank, FSB (“IndyMac Bank”) was closed by the Office of Thrift Supervision (“OTS”) and the Federal Deposit Insurance Corporation (“FDIC”) was appointed as Receiver (the “Receiver”). Under the laws of the United States, the Receiver is charged with the duty of winding up the affairs of IndyMac Bank.”

    To view the entire 2-page letter to Employees, click here (pdf).

    The FDIC (click here) has put out a guide to answer consumer, investor and media questions.

    Update – 2008-07-11: “The FDIC is in charge” was the verbal announcement ringing through the halls of IndyMac’s Pasadena offices. “Everyone show up for work on Monday.”

    The above information came from an inside source just minutes ago. A formal announcement will be made later today.

    Update – 2008-07-10: According to a source that has proved credible in the past, we were told a meeting will be held at IndyMac HQ tomorrow announcing the FDIC will put them into conservatorship.

    According to this source, $190 million was pulled in yesterday’s run, and $100 million today.

    Mr. Perry left for a haircut at 4:00 pm (PDT)

    Update – 2008-07-08: Indymac has announced the sale of Retail Lending Group (RLG) to Prospect Mortgage. In a memo received today:

    “…Prospect Mortgage will acquire the majority of the retail branches of IndyMac Bank Home Lending. This transaction includes approximately 750 employees and over 60 branch locations. We are excited to have them onboard! The IndyMac branches will adopt the Prospect brand.”
    You can view the entire announcement here.

    In further news, it appears Indymac is now CHARGING brokers to close their locked loans! This in from one such company, complete with a couple of solutions:

    “We have just confirmed word that IndyMac will only fund the [co. name deleted] loans that are currently in their pipeline if they receive a 1% on that total pipeline from us. Suffice it to say that we are not in a position to forward more than $100,000 to guarantee that these loans will close. It is our suggestion at this time that you pull your existing loans and send them to other lenders. We would suggest The Money Store, New Line or Taylor Bean & Whitaker.”
    To view a copy of the Rate Lock Fee Letter, click here. How desparate do you have to be… how broke are you when you demand 1% lock fees? The Implode-O-Meter is looking for a better solution.

    Update – 1:30pm (PDT): To quote a 1:00 pm email distributed by Grove Nichols, signed by M. Perry, Indymac is getting out of the mortgage business.

    …will necessitate the reduction in our present workforce from approximately 7,200 to roughly 3.400 or so over the next couple of months.”
    Indymac has announced they will no longer accept any new loan submissions or rate locks in either retail or wholesale, and are closing their “forward” mortgage business

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  • IndyMac is a large domino. When it falls it will bump others…and…

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  • According to the FDIC, IndyMac’s failure will result in up to $500 million in lost deposits out of $1 billion in uninsured deposits held by 10,000 customers. The agency says the failure will cost the Deposit Insurance Fund between $4 billion and $8 billion, based on preliminary estimates.

    “It’s possible this will be the most costly bank failure in history, but it’s too soon to say,” FDIC Chairman Sheila Bair said in a conference call late Friday night. The failure “could also affect premiums paid by all banks for deposit insurance,” she added.

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  • beartil2010 says:

    I agree – half $1 billion in personal deposits lost – that should spur everyone with investments to remove all their uninsured money out of these companies. Which will cause a lot more runs on a lot more banks, and the confidence in stocks will continue to plummet across this and all related sectors.

    Stock market meltdown here we go.

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  • dohousescrashinthewoods says:

    So we’re looking, in the first instance, at a triple Northern Rock when Fannie an Freddie follow, and then presumably the banking sector starts to openly crumble.

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  • Wasn’t there a thread recently predicting several dozen US banks may well to go belly-up in the next week or so ?

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  • little professor says:

    Huge news.

    With Freddie Mac and Fannie Mae on life support too, this could be the week the US economy finally snuffs it.

    Bad news for the rest of the world.

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  • the mortgage lender – Ailing lenders

    Ailing lenders haven’t shut down, but they’re significantly scaling back or are (or recently have been) in manifest financial, legal, or operational distress.

    Unfortunately, most of the industry now falls under this description,

    so we are forced to reserve this list for the more glaring cases or those which we happen to have more specific info about.

    Ailing/Watch List Lenders™:
    18. Freddie Mac
    17. Fannie Mae
    16. American Sterling Bank – Wholesale
    15. Downey Savings and Loan
    14. Franklin Bank, SSB
    13. Bayview Lending Group, LLC
    12. Thornburg Mortgage
    11. American Equity Mortgage, Inc.
    10. CTX Mortgage Company (Retail)
    9. First Horizon Home Loans
    8. BankUnited (Wholesale)
    7. Chevy Chase Bank – Wholesale
    6. IndyMac Bancorp
    5. MortgageIT
    4. Sallie Mae
    3. Meridias Capital
    2. Doral Financial Corp.
    1. Residential Capital, LLC*

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  • the northerner living in oz says:

    This has been on the cards since August last year

    There are several web sites that have predicted up to 25% of U.S banks to go under.

    It was just the timing that is difficult to predict hardly a change in consciousness.

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  • holding out says:

    When the water powered car comes out. Then I’ll call it a change in consciousness.

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  • 10. sold out said…
    ”here is the water-powered car info i promised yesterday”.

    I couldn’t get the link to work. Perhaps the site is being suppressed by the oil companies.

    No matter, I have a friend who invented the same device and it really does work – I’ve actually tried it. I obviously cannot divulge his name for fear the oil companies will have him ‘silenced’, but I’m prepared to divulge his secret to you for a nominal fee.

    Please put £500 in used fivers into a brown paper bag and place behind the litter bin outside the male toilet on platform 3 at Hogwarts station. Remember to add your name and address so I can post you this valuable instruction manual. For the bonus edition to be delivered direct to your home, please leave your house key and a list of dates when you will be away on holiday.

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