One company in the news is IndyMac.
It heated up again yesterday, they are blaming comments from Senator Charles Schumer for big withdrawals and now the Senator is firing back saying they were on the rocks anyway.
Everyone questions that statement by Schumer, this is a big bank, $18 billion deposits.
What is the FDIC doing about this?
Proposed changes in accounting rules that could force Fannie Mae and Freddie Mac to move certain Mortgage Backed Securities (MBS) onto their balance sheets should not have a major impact on their capital requirements, according to the Government Sponsored Enterprise (GSE) regulator.
The Office of Federal Housing Enterprise Oversight is working with the Financial Accounting Standards Board on changes to FAS 140, OFHEO Director James Lockhart indicated.
The two government-sponsored enterprises already have a 45-basis-point capital charge on their guaranteed MBS, he noted. Investor concerns that an accounting change would trigger a dramatic rise in their capital requirements "makes no sense," Mr. Lockhart said.
Wall Street stock investors dumped Fannie and Freddie shares on Monday on fears that the GSE might have to raise $75 billion in new capital due to accounting changes.
In an interview on CNBC-TV, Mr. Lockhart stressed that Fannie and Freddie are adequately capitalized and have raised $20 billion in new capital over the past seven months.
Fannie Mae and Freddie Mac See Sell-Off
Shares of Fannie Mae and Freddie Mac fell sharply Monday after an analyst said they may have to raise more capital than anticipated.
Freddie Mac’s share price fell $2.59, or 18%, to close at $11.91. Fannie Mae’s shares fell $3.04, or 16%, to close at $15.74.
Analyst Bruce Harting of Lehman Brothers advised clients that a possible change in accounting rules would require the two government sponsored enterprises to shift off-balance sheet securities to their balance sheets, a move that would require them to raise additional capital to meet regulatory standards.
Separately, Reuters reported that the cost of insuring the debt of Fannie Mae and Freddie Mac rose on Monday.
“IndyMac has announced they will no longer accept any new loan submissions or rate locks in either retail or wholesale, and are closing their “forward” mortgage business.”
Citing regulatory pressure to maintain its capital levels, IndyMac is shifting away from and shutting down much of its forward mortgage origination business to focus on its Reverse Mortgage unit, Financial Freedom, according to a letter from chief executive Mike Perry posted on IndyMac’s corporate blog.
IndyMac said as of July 7 it would no longer accept any new loan submissions or rate locks in its retail and wholesale forward mortgage lending channels, except for its servicing retention channel and would cut roughly half its staff of 7,200 over the next couple of months.
The company said it plans to honor all its existing rate locked loans and continue to fund them.
“While the managers and employees in these units have worked incredibly hard, these units are not currently profitable due to the continuing erosion of the housing and mortgage markets,” Mr. Perry said. “At the same time, these operations take up significant balance sheet capacity and ‘feed’ growth in the servicing asset, an asset we need to shrink given its size relative to our existing capital.”
| Date | ET | Release | For | Consensus | Prior |
| July 8 | 10am | Pending Wholesale | May | -2.8% | 6.3% |
| July 8 | 10am | Wholesale Inventories | May | 0.6% | 1.3% |
| July 8 | 3pm | Consumer Credit | May | $7.0B | $8.9B |
| July 9 | 10:30am | Crude Inventories | July 5 | n/a | -1982k |
| July 10 | 8:30am | Initial Claims | July 5 | 395k | 404k |
| July 11 | 8:30am | Export Prices | June | n/a | 0.4% |
| July 11 | 8:30am | Import Prices | June | n/a | 0.5% |
| July 11 | 8:30am | Trade Balances | May | -$62.2B | -$60.9B |
| July 11 | 10am | Michigan Sentiment | July | 55.5 | 56.4 |
| July 11 | 2pm | Treasury Budget | June | $33.0B | $27.5B |