IndyMac Bank New Investors - Selling themselves as Trailblazers? PLEEEZ!!

[HealthierChoices]

IndyMac buyers hope to profit from its loan-modification expertise

By E. Scott Reckard
February 13, 2009

The private equity group says it wants to have the Pasadena lender sell its services to other financial firms that are struggling with troubled mortgages.

The investors who are buying failed IndyMac Bank want to exploit its experience in dealing with a mountain of troubled mortgages by having the thrift sell loan-modification services to other financial firms.
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The Pasadena mortgage lender, which collapsed under the weight of bad loans in July, has been run since then under the name IndyMac Federal Bank by the Federal Deposit Insurance Corp.

Under a widely praised mortgage-modification program initiated by the FDIC, IndyMac has been helping some struggling borrowers by extending loan terms to 40 years, reducing interest rates and in some cases indefinitely suspending interest payments on a portion of each loan's principal.

The private equity group that agreed last month to buy IndyMac wants to build on that effort to "play a crucial role in resolving the current mortgage crisis" by providing "loan modification and workout services to owners of distressed mortgage portfolios," the investment group said in a purchase application filed in December with the U.S. Office of Thrift Supervision, IndyMac's regulator.

But that goal and the investors' interest, stated in the filing, in acquiring additional banks struck banking consultant Bert Ely as somewhat ambitious.


"One must crawl before one can walk, and one must walk before one can run. Are these folks getting ahead of themselves?" Ely said in an e-mail.

The investors, led by Steve Mnuchin of Dune Capital Management, include billionaire hedge fund operators George Soros and John Paulson, along with J. Christopher Flowers, a specialist in buyouts of distressed banks.

An IndyMac spokesman said the buyers would decline to comment on their plans until the transaction is completed "in the next few weeks." Officials at the Office of Thrift Supervision also declined to comment. FDIC officials couldn't be reached for comment.

The sale agreement calls for the buyers to provide $1.3 billion in new capital to IndyMac and includes a provision for the FDIC to absorb a share of the institution's future loan losses. The agency estimates that in the end IndyMac's failure will cost the federal deposit insurance fund as much as $9.4 billion.

In their filing, the investors said IndyMac, whose name they intend to change, would specialize in making jumbo mortgages, which carry higher interest rates because government-backed mortgage giants Fannie Mae and Freddie Mac can't buy them. The lender would keep the loans in its portfolio.

Jumbos, which were a core business for IndyMac, are currently defined as loans of more than $625,500 in designated high-cost areas such as coastal Southern California.

The filing also says the investors would look to expand IndyMac's 33-branch network while providing "high-quality, personalized" banking services suited to the tastes of affluent jumbo-mortgage customers.

IndyMac collects payments on about 650,000 residential first mortgages, some of which it owns but most of which it sold as fodder for mortgage-backed securities. About 10% of the loans are in foreclosure or at least 60 days in arrears.

As of Feb. 1, the lender had extended invitations to modify 38,205 loans and had completed modifications on 9,901 of the mortgages, an IndyMac spokesman said.

[HealthierChoices]

P.S. This angered me so much that I emailed the LA Times to let them know that there are many more people not getting any sort of help from IndyMac Bank, even though they claim to be so successful with loan mods.

Who knows what will happen now after today's news...We can only hope that they will start to offer help after March 4th....

[indymac non-believer]

This too upsets us. Here is our story:

Nov 2007 - rec'd letter from Indymac that our loan was going from 3300 per month to 9000.00 per month (yes, 9000...that is NOT a typo) beginning Dec 2007...have not paid since then since they won't accept partial payments

Nov 2007- filled out loan mod papers and submitted to Indymac

Dec 2007 - denied by Indymac

Jan 2008 - hired Marshall to do a loan audit

Jan 2008 - many violations found in loan docs

Jan 2008 - hired Marshall to attempt to get a loan modification holding a "violation lawsuit" over their heads

March 2008 - NOD was filed by Indymac, sale date set for Aug 5 , 2008

July 2008 - approved for loan mod , Indymac didn't tell Marshall details , but said we would be getting the paperwork in the mail and they put the Sale "ON HOLD"

August 2008 - still waiting on paperwork that never came

August 2008 - Steve Clarke from Indymac calls us and wants to work on a loan mod. Said we have nothing in our file about a "previous mod" offer, he doesn't know anything about it. Says to pay 5500.00 for three months and then they will approve a loan mod.

Aug/Sept/Oct 2008 - We paid 5500 on time to Indymac.

Nov 2008 - Marshall called very excited. Says Indymac offered us a loan mod with payment of 3890.00...incredible offer and we should get the paperwork shortly.

Jan 2009 - still waiting on that paperwork and Marshall is calling to see what is going on. Marshall is as frustrated as we are.

Feb 2009 - rec'd a letter from Indymac denying our loan mod..says we dont' qualify

Present - waiting to hear back from Marshall on their reply to him . He told them to honor the loan mod they offered or we will sue.

We are having a hard time understanding how they are getting away with offering mods, then taking them away? This can't be legal. Anyone interested in a class action "Fraud" suit? This is ridiculous what they have put us through. Sounds like they have done this to many people....
Can't understand either how they think someone can pay 9000.00 per month (this amount WAS NOT in our loan papers)...
We have a "special needs" child and do not wish to move her out of the only house she's ever known, but we're not sure we'll have a choice. We will fight them to the end...we are soo sick of what they are getting away with.

[tcarrasco]

I feel your frustrations.
I too was denied a Loan Mod-Jan 09
And denied a refi request - Feb 09
Today I am mailing a Hardship Letter 2/19/09
I am not going to give up!!!! Upside down or not I am keeping my home.
TC from L.A.,CA

[tweedle]

Let me chime in here.
For one thing, notice they are quick to ask you to send in half payments if you get behind. Then they string you along saying they are working on the loan mod.
Then they deny you again. So they got some more $ out of you in the mean time.

[ManicMangaManiac]

Originally Posted by tweedle

Let me chime in here.
For one thing, notice they are quick to ask you to send in half payments if you get behind. Then they string you along saying they are working on the loan mod.
Then they deny you again. So they got some more $ out of you in the mean time.

It certainly seems that way. My original loan is with Option One (now AHMSI) and it was a refinance for $136,500. I defaulted nearly a year later after running out of the cash I got out of the refinance. Between then and now, they've tacked on over $15k in late fees, penalties, and probably a bunch of trumped-up charges they conjured out of thin air. It just makes me PUKE! Where is the justice when we need it?? I don't have much confidence in President Obama's housing plan that's being unveiled March 4th. I haven't heard any rumbles about punishing these slimeballs, which they certainly have coming to them--but it requires governmental action, and the government is just sitting on its hands and has been for a very long time. ARRRRRRGGGHHHH!
Sally

[Dorian]

Just an update from my dealings with IndyMac. They are now OneWest Bank. I think IndyMac was just kicking the can down the road knowing that a purchase was in the works.

My first mortgage with Indy is at 8.5% and the second mortgage at 11.5%. We got hooked into these dreadful mortgages by a shady broker and bad timing - we finished construction on our house in October 2006 after banks stopped lending so we were forced to accept the mortgage since we had to pay the contractors. As of May 10th I received 2 letters from indy saying they could not renegotiate our mortgage because we were current on our payments. My attorney could not believe it! I called Indy twice and asked if they were working under the Obama housing guidelines. They said they were. I asked them how that could be since Obama's plan specifically says that they are not supposed to penalize people who pay their mortgage on time. They told me to fill out their forms online. I told them I had an attorney submit the forms and had confirmation from indy that she was designated as our third-party negotiator. One Indy employee told me that hiring an atty was a waste of money since we could do it ourselves.

Okay Lady - I should trust you? And your bank just turned me down for paying on time...sheesh! It's like they want to force people into default.

My house is worth $100,000 less than I owe them. We can demonstrate the ability to pay our mortgage if they just change it to a 5% fixed rate loan for 30 years. We have good credit which will be ruined if we pay the mortgage late but we can't continue to pay the increasing ARM rates.

Has anyone had any luckl with indy if they weren't late on their payments? Any other suggestions welcome too. I plan to write my senators and Dodd & Frank since they chair the banking committee. I also emailed the FDIC. Thanks

[tweedle]

Just a reply to acknowledge Dorian. I had no luck, or cooperation, getting them to work with me either---- before I stopped paying or ----after.
I have posted a couple of times links to unfortunate info which all adds up to the fact that some people will get help and some wont.

100k >current value will be your problem/issue that would knock you out of the guidelines.
My attorney is dealing with indymac's foreclosure mill law firm here.
Everyone keep your chin up.

[Dorian]

Hi Tweedle -
The ironic thing is that I'm not even looking for them to reduce my principle loan amount. I just want them to roll the two adjustable rate loans into a single 30 year fixed rate loan at 5%. We can demonstrate the salary needed to pay the mortgage if it was a regular mortgage. It's crazy that they would rather risk us going into default than to just adjust the loan. Of course they figure if they drag this out as long as possible they'll continue to get the extra $1000+ per month in exhorbitant interest. On the other hand, if we walked away from this house they would stand to lose about $125-$150,000 in depreciated value, unpaid mortgage payments, and the costs of foreclosure.

Are you saying that you got no response or load mod from IndyMac ever AFTER you stopped making your payments? I'd appreciate knowing that. I'd hate to ding my credit rating if it wouln't produce results anyway. I have a lawyer working with Indy but I'm not terribly confident in her at this point since I seem to have more info than she does.

I am in the middle of composing a letter to my senators and congressmen as well as Chris Dodd and Barney Frank. I've been doing research and these banks are supposed to be working on mortgages for at risk borrowers BEFORE they go into default if possible and the gov't even pays them more for doing a workout with current borrowers.

I figure if we make enough noise about this then Congress will have to put more pressure on the banks.