IndyMac Seized; Senate Passes Lender Bailout
Seized... IndyMac, the Alt-A leader and #2 mortgage lender,
became the second-biggest federally insured financial company to be seized by U.S. regulators...
after a run by depositors left the California mortgage lender short on cash.
The FDIC will run a successor institution, IndyMac Federal Bank, starting next week.
After peaking at $50.11 on May 8, 2006, IndyMac shares fell to 28 cents today.
IndyMac's shutdown may mean regulators will have to raise more money to support the federal deposit insurance program that repays customers when a bank fails.
The failure will cost the fund about $4 billion to $8 billion.
About $1 billion of uninsured deposits are held by about 10,000 customers, the FDIC said.
Those depositors will get an ``advance dividend'' equal to half the uninsured amount.
Too late for IndyMac... The nonpartisan Congressional Budget Office estimated that about 2.2 million borrowers
holding subprime or Alt-A loans will face foreclosure proceedings between Oct. 1, 2008, and September 30, 2011.
Of them, CBO said, 400,000 will probably take advantage of a new loan program (passed today by the Senate 63-5) to refinance $68 billion worth of mortgages.
The bill would allow already insolvent Fannie Mae and Freddie Mac to finance more mortgages in high-cost areas
by raising their "conforming" loan limits to as high as $625,000.
Richard Shelby, the top Republican on the Banking Committee, said:
the plan ought to calm jittery investors concerned that Fannie Mae and Freddie Mac may not weather the mortgage crisis.
"The way to keep them from getting in worse financial shape is to create a strong regulator that will monitor them closer than they have been."
Senate Banking Committee Chairman Christopher Dodd, a Connecticut Democrat, said the lenders (GSE's) are "fundamentally sound. This is not a time to be panicking...
This is a solid bill that should offer some confidence to those who invest in these government-sponsored enterprises that these are worthwhile investments."
The Nattering One muses... We first called for this trifecta on 08/09/07;
"At least one major: lender, brokerage house and bank will freeze customer assets...
and collapse and board up its doors; or will be bailed out by private investors or the government."
and on 09/11/07 listed the Dead Pool with #1 Countrywide; #2 IndyMac and Bear Stearns on dishonorable mention.
Today, the trifecta is complete. The GSE's are already insolvent, and you want them to take on MORE LOANS at HIGHER AMOUNTS?
The GSE's can't handle the 81% of $417K and under loans ($5 Trillion in book) they already have.
This additional peril is going give investors in the $1.7 Trillion of existing FNMA & FHLMC bonds confidence?
What in the hell are Shelby, Dodd and Barney "Bailout" Frank (the other ring leader in this congressional bailout circus) smoking?
The passage of the bailout bill proves that our congress is completely clueless and...
teaming with prostitutes at the beck and call of the special interests controlling our government.
The hill is reeking like a cesspool filled with shitheads and it is high time we flush these turds out of both the executive and legislative branches.
became the second-biggest federally insured financial company to be seized by U.S. regulators...
after a run by depositors left the California mortgage lender short on cash.
The FDIC will run a successor institution, IndyMac Federal Bank, starting next week.
After peaking at $50.11 on May 8, 2006, IndyMac shares fell to 28 cents today.
IndyMac's shutdown may mean regulators will have to raise more money to support the federal deposit insurance program that repays customers when a bank fails.
The failure will cost the fund about $4 billion to $8 billion.
About $1 billion of uninsured deposits are held by about 10,000 customers, the FDIC said.
Those depositors will get an ``advance dividend'' equal to half the uninsured amount.
Too late for IndyMac... The nonpartisan Congressional Budget Office estimated that about 2.2 million borrowers
holding subprime or Alt-A loans will face foreclosure proceedings between Oct. 1, 2008, and September 30, 2011.
Of them, CBO said, 400,000 will probably take advantage of a new loan program (passed today by the Senate 63-5) to refinance $68 billion worth of mortgages.
The bill would allow already insolvent Fannie Mae and Freddie Mac to finance more mortgages in high-cost areas
by raising their "conforming" loan limits to as high as $625,000.
Richard Shelby, the top Republican on the Banking Committee, said:
the plan ought to calm jittery investors concerned that Fannie Mae and Freddie Mac may not weather the mortgage crisis.
"The way to keep them from getting in worse financial shape is to create a strong regulator that will monitor them closer than they have been."
Senate Banking Committee Chairman Christopher Dodd, a Connecticut Democrat, said the lenders (GSE's) are "fundamentally sound. This is not a time to be panicking...
This is a solid bill that should offer some confidence to those who invest in these government-sponsored enterprises that these are worthwhile investments."
The Nattering One muses... We first called for this trifecta on 08/09/07;
"At least one major: lender, brokerage house and bank will freeze customer assets...
and collapse and board up its doors; or will be bailed out by private investors or the government."
and on 09/11/07 listed the Dead Pool with #1 Countrywide; #2 IndyMac and Bear Stearns on dishonorable mention.
Today, the trifecta is complete. The GSE's are already insolvent, and you want them to take on MORE LOANS at HIGHER AMOUNTS?
The GSE's can't handle the 81% of $417K and under loans ($5 Trillion in book) they already have.
This additional peril is going give investors in the $1.7 Trillion of existing FNMA & FHLMC bonds confidence?
What in the hell are Shelby, Dodd and Barney "Bailout" Frank (the other ring leader in this congressional bailout circus) smoking?
The passage of the bailout bill proves that our congress is completely clueless and...
teaming with prostitutes at the beck and call of the special interests controlling our government.
The hill is reeking like a cesspool filled with shitheads and it is high time we flush these turds out of both the executive and legislative branches.
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