Mortgage Servicing Fraud
occurs post loan origination when mortgage servicers use false statements and book-keeping entries, fabricated assignments, forged signatures and utter counterfeit intangible Notes to take a homeowner's property and equity.
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Bloomberg News

IndyMac Cuts Half its Staff as Mortgage Losses Mount (Update3)
 
By Ari Levy and Josh P. Hamilton

July 7 (Bloomberg) -- IndyMac Bancorp Inc., the lender whose market value has plunged by almost 90 percent this year, will fire half its employees after regulators said the company is no longer ``well capitalized'' and the quarterly loss widened.

IndyMac will slash its workforce by 53 percent to 3,400 employees and curtail lending, the Pasadena, California-based lender said today on its Web site. The company said it is working with regulators on a new business plan.
``We don't expect to be able to raise capital until there is more stability and less uncertainty in the housing and mortgage markets,'' Chief Executive Officer Michael Perry said in the statement.

IndyMac, the second-biggest independent U.S. mortgage lender last year behind Countrywide Financial Corp., has lost almost $900 million in the nine months ended in March amid tumbling home prices. The company is focusing on mortgages that can be sold to government-sponsored enterprises like Fannie Mae and Freddie Mac.

Home values fell in 23 of 25 U.S. metropolitan areas in April, according to Radar Logic Inc., as sales of a record number of foreclosed homes pushed prices down. Last month, Senator Charles Schumer, Democrat from New York, asked U.S. regulators to scrutinize the financial health of IndyMac and suggested it may be on the brink of failure.

IndyMac rose 4 cents to 71 cents at 4 p.m. New York time. The stock has lost 98 percent of its value in the past year.

The second-quarter loss will exceed the $184 million reported in the prior period, IndyMac said. The company said it can't be more specific because of uncertainty surrounding accounting matters.

`Too Much Risk'
``We don't expect, given the really rough state of the housing market, that IndyMac is going to be able to get out of this,'' said Jason Arnold, an analyst at RBC Capital Markets in San Francisco. ``The big problem is that no one will give them money. There's too much risk involved and not enough value in their franchise.''

... [MORE]

See http://www.bloomberg.com/apps/news?pid=newsarchive&sid=azVDqUve.O5Q

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New York Times

IndyMac Bancorp Quits Making New Loans

By THE ASSOCIATED PRESS
Published: July 8, 2008
 

LOS ANGELES (AP) — The mortgage lender IndyMac Bancorp, struggling to raise capital to stay in business, said Monday it had stopped accepting new loan submissions in its main mortgage lending divisions and planned to cut 3,800 jobs, or more than half of its work force.

The move comes as the lender works with federal banking regulators, who have determined that the company is no longer well capitalized and have asked it to submit a new business plan intended to improve its financial footing, IndyMac’s chief executive, Michael W. Perry, said in a letter to shareholders.

In the letter, Mr. Perry said the holding company for IndyMac Bank has not succeeded in raising additional capital and does not expect to succeed until the housing and mortgage markets are more stable.

While closing its retail and wholesale new loan divisions, the company said it would focus on building its reverse mortgage business and operating its loan servicing units.

In addition, IndyMac will cut its work force to about 3,400 employees from 7,200 over the next couple of months, a move the company said would reduce operating expenses by about 60 percent.

Mr. Perry said he has also asked the board to reduce his base salary by half.

See http://www.nytimes.com/2008/07/08/business/08bank.html?ref=business

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Looks like the end of IndyMac!  Can total collapse be far behind??  Look for a run on deposits over the next few days.  Good riddance!

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Bloomberg News
 
IndyMac Falls After Regulators Say It Isn't `Well Capitalized'

By Linda Shen

July 8 (Bloomberg) -- IndyMac Bancorp Inc., the California- based lender that is firing half its employees, plunged 37 percent in early trading after being told by regulators the bank isn't ``well capitalized.''

IndyMac dropped 26 cents to 45 cents at 8:05 a.m. New York time in early trading. The lender will slash its workforce by 53 percent to 3,400 employees and curb lending, IndyMac said yesterday on its Web site. The Pasadena-based company said it was working with regulators on a new business plan.

``We don't expect, given the really rough state of the housing market, that IndyMac is going to be able to get out of this,'' said Jason Arnold, an analyst at RBC Capital Markets in San Francisco, in an interview yesterday. ``The big problem is that no one will give them money. There's too much risk involved and not enough value in their franchise.''

The lender's so-called operating liquidity stands at about $1.7 billion, IndyMac said in a regulatory filing today. The company's second-quarter loss will exceed the $184 million reported in the prior period, IndyMac said. The firm has lost more than 95 percent of its market value in the past 12 months.

IndyMac, the second-largest independent U.S. mortgage lender last year behind Countrywide Financial Corp., lost almost $900 million in the nine months ended in March.

To contact the reporter on this story: Linda Shen in New York at lshen21@bloomberg.net

See http://www.bloomberg.com/apps/news?pid=20601087&sid=a5C0PPmqjpYA&refer=home
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Bloomsberg News
 
IndyMac Blames Senator's Comments for Withdrawals (Update3)

Tuesday, July 8, 2008

By David Mildenberg and Ari Levy

July 8 (Bloomberg) -- IndyMac Bancorp Inc., the U.S. mortgage company that stopped most of its lending as losses mounted and capital deteriorated, blamed Senator Charles Schumer for ``elevated levels of deposit withdrawals.''

Schumer's comments last month about the lender's reliance on deposits purchased from third parties are causing customers to pull their money and making it harder to raise funds, the company said in a regulatory filing today. Schumer responded calling IndyMac a ``junior version'' of Countrywide Financial Corp. and said bad lending practices date back several years.

IndyMac, based in Pasadena, California, said yesterday that it's firing half its employees and is working with regulators on a new business plan after failing to raise capital. The demise of IndyMac, the second-largest independent U.S. mortgage lender last year behind Countrywide, would be the biggest since the bankruptcy of American Home Mortgage Investment Corp. in August.

``They're in the unfortunate position of being a specialty mortgage entity at a time when mortgage assets are out of favor,'' said Christopher Wolfe, an analyst at Fitch Ratings in New York, in an interview. Fitch reduced IndyMac's debt four levels today to CC from B-. ``Our rating suggests there's a high degree of doubt that they can'' survive, Wolfe said.

IndyMac fell 27 cents to 44 cents at 4 p.m. in New York Stock Exchange composite trading, reducing its market value to $44 million from more than $3.4 billion in mid-2006.

Schumer Letters

Schumer, the New York Democrat, sent letters last month to home-lending regulators including the Federal Deposit Insurance Corp., warning of a potential collapse. Those comments led to additional restrictions on the bank's borrowings and caused its so-called operating liquidity to dwindle to about $1.7 billion, the company said in the filing today.

IndyMac spokesman Evan Wagner declined to comment beyond the company's statements.

The lender lost almost $900 million in the nine months ended in March and its second-quarter loss will exceed the $184 million reported in the prior period, IndyMac said.

Because it doesn't have enough capital to meet the ``well capitalized'' threshold set by regulators, IndyMac said it can't fund its lending with deposits acquired through independent brokers. IndyMac's request for a waiver from the FDIC to allow for brokered deposits hasn't been approved, the company said.

``We don't expect to be able to raise capital until there is more stability and less uncertainty in the housing and mortgage markets,'' IndyMac Chief Executive Officer Michael Perry said in a statement yesterday.

Alt-A Loans

At the bank branch adjacent to its headquarters, spread across a coffee table were blue brochures entitled, ``Your Insured Deposits: FDIC's Guide to Deposit Insurance Coverage.'' There were no lines forming at the branch today.

IndyMac specialized in so-called Alt-A mortgages that usually didn't require borrowers to provide documentation on their incomes. The lender said it is working with regulators on a new business plan while it curbs lending and will slash its 7,200-strong workforce by 53 percent.

``IndyMac was one of the banks that was using relatively weak underwriting standards on the basis that housing prices would continue to rise in value,'' said Jason Arnold, an analyst at RBC Capital Markets in San Francisco, in an interview yesterday. ``With prices coming down, that became the bottom card in the house of cards built by these lenders.''

The company's key asset is its Southern California retail bank network with 33 branches and $18 billion in deposits, mostly insured by the FDIC, Arnold said. IndyMac's inability to find a buyer or attract capital, even amid pressure from regulators, reflects continued concern over the declining value of its loans, he said.

IndyMac agreed to sell most of its retail mortgage branches to Prospect Mortgage. The deal gives the Northbrook, Illinois based-company more than 60 branch offices with 750 employees, Prospect said today in an e-mailed statement.

To contact the reporter on this story: David Mildenberg in Charlotte at dmildenberg@bloomberg.net; Ari Levy in San Francisco at alevy5@bloomberg.net.

Last Updated: July 8, 2008 16:49 EDT

See http://www.bloomberg.com/apps/news?pid=20601087&sid=aaB4cryHdFxk&refer=home 

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Comment:  It turns out that IndyMac is a well capitalized and well managed depository concern with a sound portfolio of mortgage assets.  All of the recent negative press to the contrary seems to have arisen from ill-conceived, intemperate and defamatory comments about IndyMac by Sen. Charles SCHUMER (D-NY)!  So everyone who dumped IndyMac stock or withdrew their deposits within the past few days should rush to reinvest or redeposit their funds.  NOT!  
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Pool on IndyMac FDIC Receivorship Date

Who wants to get in on the pool as to the date that IndyMac FSB enters receivorship by the FDIC??

I am willing to wager a cup of overpriced Starbucks coffee!

I pick Friday, July 18, 2008.

Anyone else want to pick a date and play??

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Miss Molly
Once the FDIC gets involved- all hell breaks loose with those mortgages. They basically throw them to the wolves.

Remember what happened to all those Superior Bank people AFTER the FDIC took over the bank? 

I do. 
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