Citing continued weakness in the U.S. residential mortgage market and the "virtual absence of a private, secondary mortgage market," analysts at Fitch Ratings today downgraded the long-term issuer default rating of Indymac Bancorp Inc. to junk status. Indymac, which posted a $202.7 million third-quarter loss, announced last week that it would lay off 2,403 workers, or about one in four employees. The alt-A lender has been hard hit by the reluctance among secondary market investors to buy mortgages unless they are eligible for guarantee or purchase by Fannie Mae and Freddie Mac. In a press release, Fitch analysts said Indymac's return to profitability "will be challenging as changes in mortgage industry dynamics, once viewed as temporary, become more permanent." Indymac saw loa...
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