Industry NewsMortgage

IndyMac halts lending, will cut half its workforce

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

IndyMac Bancorp Inc. announced Monday that it's no longer considered "well capitalized" by regulators, has stopped accepting new loan submissions or rate locks, and will lay off 3,800 employees -- about half of its workforce. IndyMac Chairman and CEO Michael W. Perry promised the company will honor all existing rate-locked loans and will continue to fund the loans in coming weeks. Falling home prices and rising delinquencies and foreclosures have reduced the value of IndyMac's mortgage-related assets, and the company hasn't been able to raise additional capital through investment banks, Perry said in a letter to shareholders. The "traditional way" to raise capital is "to sell assets and shrink the balance sheet," Perry said. Because there are no bids for most of IMB’s mortgage loans and securities, or the offers are so low, “fire-selling” assets would "actually deplete capital further. As a result, the most realistic and cost-effect...