Industry News

Fitch cuts Indymac debt ratings

Future-Proof: Navigate Threats, Seize Opportunities at ICNY 2018 | Jan 22-26 at the Marriott Marquis, Times Square, New York

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 loan production fall 30 percent in the third quarter, to $16.8 billion, after fears about rising mortgage defaults and falling home prices disrupted the market for securities backed by mortgages and o...