Banking Regulators Seized IndyMac
SOURCE: Reuters
California-based IndyMac, which specialized in a type of mortgage that often required minimal documents from borrowers, became the fifth U.S. bank to fail this year as a housing bust and credit crunch strain financial institutions. Adam Compton, co-head of global financial stock research at RCM in San Francisco said "IndyMac is a company that was pretty much 100 percent invested in mortgage assets, and we're in a bad mortgage market, and it had no capital. It's not complicated".
The Office of Thrift Supervision (OTS), who is IndyMac's primary regulator, said that they do not expect significant market impact from the IndyMac closure because the firm is not a systemic institution and is without numerous counterparties.
Daniel Alpert who is an investment banker at Westwood Capital in New York predicts that "IndyMac's takeover by the FDIC is one of many to come". A former FDIC official, Ann Graham said that it isn't unprecedented for the FDIC to start running a bank after it fails. This allows the FDIC to shop around before selling the institution rather than hurrying a sale. They are allowed to operate the institution for up to two years.
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California-based IndyMac, which specialized in a type of mortgage that often required minimal documents from borrowers, became the fifth U.S. bank to fail this year as a housing bust and credit crunch strain financial institutions. Adam Compton, co-head of global financial stock research at RCM in San Francisco said "IndyMac is a company that was pretty much 100 percent invested in mortgage assets, and we're in a bad mortgage market, and it had no capital. It's not complicated".
The Office of Thrift Supervision (OTS), who is IndyMac's primary regulator, said that they do not expect significant market impact from the IndyMac closure because the firm is not a systemic institution and is without numerous counterparties.
Daniel Alpert who is an investment banker at Westwood Capital in New York predicts that "IndyMac's takeover by the FDIC is one of many to come". A former FDIC official, Ann Graham said that it isn't unprecedented for the FDIC to start running a bank after it fails. This allows the FDIC to shop around before selling the institution rather than hurrying a sale. They are allowed to operate the institution for up to two years.
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