Wednesday, July 2, 2008
IndyMac Works With U.S. Regulators
Home-mortgage lender IndyMac Bancorp Inc. said it is working with U.S. regulators on a plan to shore up the company's "safety and soundness."
In a securities filing late Monday, the Pasadena, Calif., lender and savings-bank operator promised more information "as that plan becomes more fully developed." Last week, IndyMac's chairman and chief executive, Michael Perry, said the company is trying to raise more capital.
IndyMac, hit hard by rising defaults and falling home prices, also said in its filing that its financial position "has deteriorated" since the first quarter. In May, IndyMac posted a $184.2 million loss for the first quarter.
A spokesman for the U.S. Office of Thrift Supervision, which regulates IndyMac, declined to comment.
Last week, U.S. Sen. Charles Schumer (D., N.Y.) sent a letter to the OTS and other federal regulators asking them to monitor IndyMac's financial health more closely.
In its filing, IndyMac said news reports of that letter sparked withdrawals of about $100 million of deposits at IndyMac's savings bank Friday and Saturday. That was about 0.5% of total deposits, IndyMac said.
Sen. Schumer said Tuesday that he has spoken with Federal Deposit Insurance Corp. Chairman Sheila Bair and Treasury Secretary Henry Paulson about IndyMac. "I think they are on top of it," Sen. Schumer said of the regulators.
Until recently, IndyMac specialized in Alt-A loans, a category between prime and subprime that typically involves borrowers who don't fully document their incomes or assets. Like other lenders, IndyMac has been forced to shift to making loans that can be sold to federally chartered mortgage investors Fannie Mae or Freddie Mac or insured by the Federal Housing Administration.
In the first quarter, IndyMac was the 11th-largest producer of U.S. home mortgages, according to Inside Mortgage Finance, a trade publication.
Write to James R. Hagerty at bob.hagerty@wsj.com
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