Industry News

IndyMac says Fannie, Freddie changes will hamper growth

Delinquencies continue to rise in servicing portfolio

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Shares of alt-A lender IndyMac Bancorp Inc. were in freefall this week after the company reported a significant increase in delinquencies among prime, first-lien loans in November, and said new policies being implemented by mortgage repurchasers Fannie Mae and Freddie Mac could limit future growth. IndyMac said that about 75 percent of its $4 billion in November loan production was eligible for sale to the government-sponsored enterprises (GSEs), with production of prime jumbo loans exceeding the $417,000 conforming loan limit totaling just $600 million. The GSEs have increased surcharges for borrowers with credit scores below 680 sometimes classified as "alt-A," and will require down payments of at least 5 percent on all loans in "declining markets" (see Inman News story). Although IndyMac expects the loans it made in November to perform better than those it made last year and in the first nine months of 2007, credit quality of the company's $196 billion serving portfoli...