Indymac Closes Both Retail and Wholesale Departments
Tuesday, July 8th, 2008“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.”