Wait 'til next year for an IndyMac sale

IndyMac Federal Bank won’t get sold this year after all.

At least that was the word from the collapsed Pasadena mortgage lender and from regulators late today following the government’s latest round of talks with a New York-based investment group.

One person close to the discussions, who wasn’t authorized to speak publicly about it, said it was likely the negotiators would take off Friday as well as New Year’s Day. So when could an announcement come?

“Maybe Monday,” said the source.

IndyMac spokesman Evan Wagner, who had spent the last few months declaring that a deal would be struck by year-end, was sounding a bit exasperated.

"As of today, I can assure you the sale will occur sometime before the end of 2009," Wagner said.

The Federal Deposit Insurance Corp., which has operated IndyMac since the exotic-loan specialist failed in July, initially hoped for a sale by October, then pushed the deadline back.

The would-be buyers were identified this week as a partnership headed by hedge fund operator John Paulson; J. Christopher Flowers, a prominent investor in distressed banks; and Steven Mnuchin, chairman of private equity firm Dune Capital, which at one point was an unsuccessful bidder for Donald Trump’s troubled casino holdings. The investors haven’t publicly confirmed their interest in IndyMac.

FDIC and IndyMac officials wouldn’t say what was holding up the sale.

One possible snag was an effort by Fannie Mae, the giant mortgage buyer now controlled by the government, to force IndyMac or its successors to buy back dud loans the thrift had sold to Fannie Mae.

Such “put backs” have become common in the industry as loan buyers have argued that sellers misrepresented the integrity of the mortgages being sold.

--E. Scott Reckard

Comments

[BJ]

The FDIC cannot sell anything to Fannie. The sad part of the entire equation is the regular folks, the loan originators, funders, processors and set-up clerks will work their butt off and not get paid. Indy screws the public and employees forever and for all.

[The Real Estate Guy]

When are we going to start treating White-collar criminals the same way we treat Blue-collar ones?

I can't wait to hear when a lot of these ex-executives start going to prison in groves!

We need justice!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

[fran quittel]

Uninsured IndyMac depositors have communicated with John Paulson's PR spokesman , Armel Leslie, to be equally represented in Congressional hearings on the examination of the IndyMac matter in the very same way John Paulson appears before Congress. We are asking to receive the same consideration and to be heard as this very successful investor. It appears inconceivable that led by Schumer and the FDIC, uninsured DEPOSITORS who lost cash sometimes based on misinformation provided by IndyMac staff, are being punished while in this transaction, the FDIC will repay itself FIRST and a hugely successful hedgefund will create an opportunity for expansion. People are discussing Bernie Madoff as a new standard for greed: make no mistake, watch this transaction carefully. The FDIC and its buddies have certainly trumped Madoff here.

[martscan]

I have no sympathy for uninsured depositors of IndyMac Bank. And to think it is "inconceivable" that they are being punished because of actions of Sen. Schumer and the FDIC is pure folly, and nothing but 'scapegoating' in a feeble attempt to cover the losers' incompetence in managing their own money. And dare I say 'greed', in holding out for IMB's higher interest rates when prudence called for safety over returns.

Given that it was common knowledge for weeks that IMB was struggling, that Schumer raised a red flag that could hardly escape the notice of even casual observers, that the stock price was on a steady downtrend for months, for a depositor of the bank to maintain accounts in excess of protected limits only proves the stupidity, and avarice, of those depositors. The mere fact that Schumer's revelation of facts, and the ensuing drawdowns, and the time between the official takeover of the bank by the FDIC allowed ample time for any depositor to reduce account balances...blows their fallacious argument out of the water. If these dumb, uninsured depositors had any intelligence they should have thanked Schumer, parked their unprotected dough in T-Bills and appreciated the FDIC for letting them sleep nights. As for a seat at the table with John Paulson, or any other qualified firm, before Congress, that's a joke, unless these losers want to make a bid for IMB's assets...otherwise they won't even be allowed in the hearing room. The Federal Court is their only venue for redress...but of course, they will throw the case out as having no merit.