Who owns indymac mortgages

What made IndyMac different from many of those lenders is that it was using bank deposits to come up with the cash to make the loans.

As long as home prices kept rising, as they did while the housing bubble was inflating, there were no problems. People could sell the home and walk away with more money than they owed. Once the bubble burst and prices started to decline, loan defaults started to mount. Related: Angelo Mozilo and his doomed mortgage machine. As home prices started to fall in , some subprime lenders filed for bankruptcy.

In March , Wall Street firm Bear Stearns essentially failed because of its bet on the riskier mortgages, and it was sold at rock-bottom prices. Even Fannie and Freddie were losing money. She thought that was months away. But when some members of Congress raised questions about the bank's future, it sparked a rush by the bank's larger customers to withdraw their money, causing a cash crunch that sped IndyMac's demise. She said so many loans had been made with questionable loan standards that the bank's failure had become inevitable.

The one major regret Bair said she has about the IndyMac failure was that the FDIC closed the bank early on the afternoon of July 11 because it wanted to notify members of Congress of the action before it got too late on the East Coast.

That only fed the panic among IndyMac customers. But people were confused and scared," she said. Flowers, who launched, then dropped, a bid to buy student lender Sallie Mae last year, also is a former Goldman Sachs partner.

The IndyMac deal comes as regulators have eased restrictions on such purchases. Previously, private-equity firms could not hold more than a The Seattle-based thrift was the biggest bank to collapse in U. A total of 25 U. Many more banks are expected to sink this year. One unresolved issue is IndyMac's relationship with investors in mortgage-linked securities, including Fannie Mae and Freddie Mac, the government-controlled mortgage finance titans. Fannie, Freddie and other investors have the right to try to return IndyMac loans if they claim they violate the terms under which they buy mortgages.

Christopher Flowers, computer mogul Michael S. Dell and hedge fund operators George Soros and John Paulson. Follow ScottReckard for news of bank deals and mortgage lending. SpaceX crew launch marks space travelers in 60 years. Hot inflation report slams bond market, sends stocks lower. Justice Department sues Uber over wait-time fees charged to disabled passengers. All Sections. About Us.