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IndyMac said Monday that it had been unable to raise fresh capital and that it is likely to report a loss for the second quarter bigger than the $184.2 million loss recorded in the first quarter. Regulators also have advised the thrift operator that it is no longer considered "well-capitalized." When a bank or thrift is no longer deemed well-capitalized, regulators are required to ratchet up their scrutiny.
Late last month, Sen. Chuck Schumer (D., N.Y.) sent a letter to regulators raising questions about the solvency of the thrift and prodded them to do more to monitor the company closely. The letter spooked investors and depositors, quickly leading customers to withdraw $100 million in deposits.
Unless it quickly raises capital or finds a way to sell major portions of its business, IndyMac can't survive for the next several quarters unless overall housing prices show some signs of life. A rebound in housing would make the mortgage-backed securities market much more liquid, supporting prices and curtailing writedowns. It would also help to stabilize IndyMac's loan quality and enable it to pare down its quarterly provisions for loan loss reserves.
Following the lender's announcement, Fitch Ratings cut its long-term issuer default ratings for IndyMac further into junk territory. Research firms Friedman Billings Ramsey and RBC Capital Markets lowered their price targets on the stock all the way to $0.
Acknowledging that it would be unable to sell assets -- and thus boost the capital ratios -- without incurring even larger net losses, IndyMac said Monday it would "curtail most new loan production." While the company will fund new loans with rates already locked-in, it will no longer accept most retail and wholesale mortgage applications.
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So, in other words...you have a lender who won't/can't lend.
So, in other words...they're not a lender anymore.
I mean, If it were a car dealership and it said "I won't sell any more cars because I'm not making any money, but I'll just hold on to what I've got and pray for the best....and that's just the way it is"....then I'd definitely not want to be part of that car selling organization. It's just a dead duck in the water.
I wonder if anyone will try and revive this dead duck.
Unless it quickly raises capital or finds a way to sell major portions of its business, IndyMac can't survive for the next several quarters unless overall housing prices show some signs of life. A rebound in housing would make the mortgage-backed securities market much more liquid, supporting prices and curtailing writedowns. It would also help to stabilize IndyMac's loan quality and enable it to pare down its quarterly provisions for loan loss reserves.
Following the lender's announcement, Fitch Ratings cut its long-term issuer default ratings for IndyMac further into junk territory. Research firms Friedman Billings Ramsey and RBC Capital Markets lowered their price targets on the stock all the way to $0.
Acknowledging that it would be unable to sell assets -- and thus boost the capital ratios -- without incurring even larger net losses, IndyMac said Monday it would "curtail most new loan production." While the company will fund new loans with rates already locked-in, it will no longer accept most retail and wholesale mortgage applications.
*************************************
So, in other words...you have a lender who won't/can't lend.
So, in other words...they're not a lender anymore.
I mean, If it were a car dealership and it said "I won't sell any more cars because I'm not making any money, but I'll just hold on to what I've got and pray for the best....and that's just the way it is"....then I'd definitely not want to be part of that car selling organization. It's just a dead duck in the water.
I wonder if anyone will try and revive this dead duck.
Your forgetting that IndyMac isn't just a loan originator, that it is also a commercial and retail bank that... btw is offering the best rates, FDIC insured.
"The immediate cause of the closing was a deposit run that began and continued after the public release of a June 26 letter to the OTS and the FDIC from Sen. Charles Schumer of New York, according to the OTS. The letter expressed concerns about IndyMac's viability. In the following 11 business days, depositors withdrew more than $1.3 billion from their accounts."
Deposits:
Deposit inflows in the three days prior to June 27, 2008: $31.2 million
June 26, Senator Schumer's address
Deposit outflows beginning June 27, 2008: $730.2 million through July 7 and $1.3 billion through July 10
They were trying to work things out and was still receiving deposits until the senators remarks. Oh well, lost jobs and probably more banking institution consolidation. I guess BOA and the bigger institutions can get bigger and we'll have no choice but to bank with them instead.
Location: Georgia, on the Florida line, right above Tallahassee
10,471 posts, read 15,835,178 times
Reputation: 6438
I missed out on 4 days of really high interest, though.
HA HA HA HA HA.
Last edited by 70Ford; 07-12-2008 at 09:53 AM..
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