IndyMac failed because of liquidity crisis prompting seizure by U.S. regulators – how close is your mortgage banker?
Fred Day
Jul. 12, 2008

What happened to the IndyMac bank should work as a wake up call for all the mortgage investors and homeowners. IndyMac Bancorp Inc. is the second biggest federally insured financial company seized by U.S. regulators after a run by depositors. The run on bank left the California mortgage lender severely short on cash. The Federal Deposit Insurance Corp who is bailing out the bank will run a successor institution, IndyMac Federal Bank, starting next week. Bank’s customers will have access to funds this weekend via automated teller machines. Regulators intend to eventually sell the company.

It is a serious problem as the financial meltdown continues.

How close is your mortgage banker close to a catastrophe like this. You can simply find out by asking a simple question – have you ever solicitude and loaned no income documentation mortgages? If the answer is yes, your mortgage banker is in deep trouble also. Big banks like Wachovia and others did provide no doc loans up to $50,000 in the last fie years. Those loans are in jeopardy too.

IndyMac bank specialized in so- called Alt-A mortgages, which didn''t require borrowers to provide documentation on their incomes. IndyMac's home state, where Countrywide Financial Corp. was also located before it was bought last week, has been among the hardest hit by foreclosures.

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