IndyMac Stops Making Mortgage Loans

By
Real Estate Agent with Lyon Real Estate BRE #00697006

house sitting on a pile of moneyIf you're a seller who is having problems negotiating a short sale or obtaining debt relief at IndyMac, consider the fact that IndyMac today says it is closing its mortgage business and laying off 3,800 employees, which is more than half of its workforce.

This means effective immediately it will make no new mortgage loans. IndyMac says it will honor its existing loan applications that have a locked-in interest rate, but borrowers who are relying on the lender to perform and fund pending loans might be feeling a little nervous these days. Those who haven't locked a rate are flat out of luck.

The bank has been struggling throughout this subprime upheavel, experiencing shrinking assets and regulatory pressures.

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Elizabeth Weintraub is an author, home buying expert for About.com, a Land Park resident, and a veteran real estate agent who specializes in older, classic homes in Land Park, Curtis Park, Midtown and East Sacramento, as well as tract homes in Elk Grove, Natomas, Roseville and Lincoln. Weintraub is also a Sacramento Short Sale agent who lists and successfully sells short sales throughout the four-county Sacramento area with an emphasis on Elk Grove. Call Elizabeth Weintraub at 916.233.6759. Put 40 years of real estate experience to work for you. Broker-Associate at Lyon Real Estate. BRE License # 00697006.

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Photo: Unless otherwise noted in this blog, the photo is copyrighted by Big Stock Photo and used with permission.The views expressed herein are Weintraub's personal views and do not reflect the views of Lyon Real Estate. Disclaimer: If this post contains a listing, information is deemed reliable as of the date it was written. After that date, the listing may be sold, listed by another brokerage, canceled, pending or taken temporarily off the market, and the price could change without notice; it could blow up, explode or vanish. To find out the present status of any listing, please go to elizabethweintraub.com.

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Location:
California Sacramento County Sacramento
Groups:
Realtors®
California Short Sales, REO's, and Foreclosures
Posts to Localism
Lyon Realtors
Club Chaos
Tags:
indymac
mortgages
short sale
sacramento

Comments 29 New Comment

Ambassador
567,236
C Tann-Starr
Tann Starr & Associates, Inc.

This drama is the perfect illustration of "unintended consequences" when the government insists lending institutions must fund particular types of projects, only to back peddle later and claim "they" should not have funded it "that particular way."

July 15, 2008 04:52 PM
Anonymous #27
Anonymous
Anonymous

If, C Tann, you're talking about CRA (Community Redevelopment Act) loans, there's no indication that they're defaulting any deeper than any other type of loan.  Probably the only type of loans still performing well are conforming 30 year FRM to prime borrowers.

 

July 16, 2008 04:23 AM
Anonymous #28
Anonymous
Chip Harris

I had a refinance that closed on July 1st and was supposed to fund on July 7th.  Indymac refused to fund the loan, stating that they discovered in a prefunding audit that the "collateral value was not adequate."  This is of course complete bs, because the file had been cleared to close, docs were sent out, and the appraisal was approved.  Does anyone know if my borrower has any recourse?  Rates have gotten worse, so it's not as simple as moving the loan to another lender.

July 16, 2008 03:40 PM
Anonymous #29
Anonymous
Anonymous

When Capitol Commerce, a regional lender, folded a few years ago, I had several loans in their pipeline.  Naturally, rates worsened post-implosion.  I paid $10K out of my own pocket to take the loans out of Capitol Commerce's pipeline and lock the loans at another lender at the same interest rate.  It's just something you gotta do sometimes to maintain your own credibility.

You could set the loan up at another lender and float until rates get better or bite the bullet now.  That's about all you can do.

July 16, 2008 04:00 PM
Anonymous #30
Anonymous
EDNA JACKSON

This is sad how people got long shark with these greedy lenders and realestate agency. If your credit is not shot, I have some good news where all other lender's failed, my lender never did anything wrong!  With my loan I have 3 1/2 years on my loan to go and people in my subdivison have 19 years on their loan.  It took me from a 30 year fixed with 28 years to go and I  qualifed for a 10 year loan. I got so excited I joined the company and became a mortgage broker in the state of Georgia.

 

edna_c_2002@yahoo.com

September 22, 2008 03:44 PM
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1,145,635

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Broker-Associate at Lyon Real Estate, midtown Sacramento office. Selling since 1974. Homebuying expert at About.com. Best short sale agent in Sacramento. Elizabeth sells homes from Galt to Lincoln.
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Author Bio: Elizabeth Weintraub is a Sacramento real estate broker, author, home buying expert for About.com, a Land Park resident, who specializes not only in older, classic homes in Land Park, Curtis Park, Midtown and East Sacramento but sells extensively from Elk Grove to Lincoln. Weintraub is prominently known as the #1 Sacramento Short Sale agent throughout the Sacramento four-county area. Call Elizabeth Weintraub at 916.233.6759. Put 40 years of real estate experience to work for you.