HEINDRICK SO

Well its not “official” yet, but as of tomorrow, it is heavily rumored that Indymac Bank will make an official statement regarding operations.  Wholesale lending is expected to completely shutdown, while its commercial lending may follow suit. They will most likely refuse any new loans, while loans currently in their pipeline will probably be expected to fund before the end of July. In addition, there has been some speculation regarding the FDIC taking over and people are starting to wonder about their FDIC-insured-deposits. Well if you are under the FDIC limits, you are covered – as expected. If you happen to be over the FDIC limits, you may want to stay posted for their breaking news and official statements.

Despite so many fallout’s lately, it’s quite sad to see Indymac Bank go as a wholesale lender. They were a very strong bank for brokers as they offered strong and competitive rates – as well as keeping FHA and reverse mortgages in their business model. Unfortunately, no one can avoid the demise of subprime loans and Pay Option Arm mortgages. And well, Indymac had its hand quite deep into those mortgages, and with their stock funneling down [67 cents as of 7/6/08] this really does not come as a “shocking” surprise.

Again, no “official” word – but rumors as strong as this one are accurate 99.9% of the time.

Update: [7.07.08] It is now official

Here was the official email from Indymac:

Dear Indymac Mortgage Banker or Broker,

A few months ago, when WaMu made the decision to exit wholesale lending, we wrote to let you know that we were committed to all of our mortgage professional customers, and that we were working hard to rebuild our business model. Since then, our employees have worked tirelessly and professionally to rebuild our production model and I am very thankful for their service and their unwavering commitment under the most difficult of circumstances. We have successfully transformed ourselves into a competitive Agency and Government lender, and for this we should all be very proud.

However, with the continued very difficult and challenging environment, we are taking steps to continue to protect Indymac’s safety and soundness, and have made the difficult decision to cease production of new mortgages, which includes exiting the third-party lending business altogether. Going forward, Indymac will be focused on operating its Southern California retail banking business, offering reverse mortgages through Financial Freedom and operating our home loan servicing and opportunistically growing these groups over time as market conditions permit.

Our decision to exit third-party lending is effective immediately, however, the following timeframes and guidelines are in effect:

• Effective immediately we will no longer accept any new rate locks.
• Effective immediately we will no longer accept new credit package submissions (either in physical form or through e-Flow^SM functionality) for loans that do not have a valid rate lock.
• The last day to fund refinance transactions will be July 31, 2008.
• The last day to fund purchase transactions will be August 15, 2008.

Important Message About Protecting Your Rate Locks:

In order to protect your rate locks, we will require a 1% cash deposit to convert these loans to mandatory delivery. All fees must be received by the end of business on Thursday, July 10th, or your rate locks are subject to cancellation. These fees are fully refundable in the event IMB declines the loan. This fee requirement is all inclusive. You must protect the entire pipeline as part of this process. If you do not submit the required fee for any individual loan as part of this process, all of your rate locks will be subject to cancellation.

Please understand that all of our regional operating centers will be closed. Your regional mortgage production team will be in contact with you to ensure a smooth transition over the coming weeks and facilitate timely processing of your loan pipeline. Additionally, we will keep our Pasadena regional office open for a limited time, until we have cleared out our entire pipeline of loans.

All of these actions are necessary and are designed to keep Indymac Bank as an institution safe and sound; we believe they are the necessary steps we must take to ensure the company’s survival during this turbulent period.

On behalf of the roughly 800 employees of Indymac’s Mortgage Professionals Group, I want to thank you for your business and support of Indymac Bank over the past 15 years.

Sincerely,

Drew Buccino CMB
CEO Mortgage Professionals Group
Indymac Bank

It is sad to see them go, but the show must go on.

[Prospect Mortgage Aquires Update]

Well, all may not be lost for Indymac Employees. Apparently certain retail branches will be aquired by Prospect Mortgage. Here is the statement made by Prospect:

(Northbrook, IL, July 8, 2008) – Prospect Mortgage has signed an agreement to acquire the majority of IndyMac Bankcorp’s retail mortgage branches. Terms of the transaction were not disclosed.

The transaction encompasses approximately 750 employees along with more than 60 branch offices which will rebrand as Prospect Mortgage. John Johnston and Ron Bergum will remain in leadership roles with the retail branch group and report to Mark Filler, CEO of Prospect Mortgage.

“The IndyMac transaction benefits our loan officers, customers, sales managers and referral sources. This is growth for the right reasons, not just for the sake of growth,” said Mr. Filler. “The IndyMac transaction will enable us to increase our investment and success in marketing, technology, and customer service levels.”
With completion of the IndyMac transaction, Prospect Mortgage projects that it will become one of the largest independent retail mortgage company in the country.