US mortgage bank IndyMac goes under, victim of credit crisis
Business News
Jul 12, 2008, 12:27 GMT
Older Talkback
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For the truth about IndyMac:
'IndyMac specialized in Alt-A loans, a type of mortgage that can often be offered to borrowers who don't fully document their incomes or assets. The company sold most of the loans it originated but continued to hold some on its books. As defaults piled up, IndyMac's finances deteriorated.' It is outrageous that the FDIC would ensure a bank that does not require borrowers to show Social Security Numbers or proof of income for ability to pay. Many of these loan defaults are from Illegal Aliens who use ITIN numbers and other sham documents. Now they just walk away and the American taxpayers can pick up the tab. Absolutely disgraceful. Not surprised for a California-based bank in a State going bankrupt due to illegal aliens and a legislature and governor who live in denial.
In response to Marge1- The fact is that every lender, not just IndyMac, doled out cash to borrowers who applied for loans as 'stated income' or 'Alt-A loans.' I agree with you up to the point where you take a left turn and blame this problem on illegal aliens. How do you account for millions of US citizens who also benefitted from these loans? This bubble is about the banks and their greed. Let's not get all xenophobic at the first sight of trouble.
What would US federal regulators do with all the 'assests' at IndyMac? No Bail Out.
THIS ENTIRE MESS WAS SET UP FOR FAILURE. IN THE END WE WILL BE POORER AND THE GOVERMENT WILL HAVE MORE POWER. I HEARD OLD PEOPLE SAY OVER AND OVER THAT THE BANKS CREATED THE 1929 FALL. I NEVER BELEIVED UNTIL I WATCHED IT HAPPEN. I FEAR THE WORST IS YET TO COME.
The sub-prime diaster is over. Alt-A is over, its time for the A loans to fail. And being in the mortgage business and seeing what I see, its not a guess. Just remember, when the feds rates the rate 24 times, what did you expect? As far as bad loans? Tell me, Why did the State regulators stop the bad loans for all those years when they did there audits? Because it was what the goverment wanted. The sad truth, America srcewed its own. What have I learned, never trust the goverment again. NEVER!
Marge1 is right, there is a elephant in the room and no see it.
Marge1 is right, there is a elephant in the room and no one see it.
Indymac, Countrywide, New Century and others pushed easy lending. Wall Street bought these security backed loans and made a bundle. Many borrowers purchased houses that they couldn't afford.
Who's fault is it?
Everyone. It's called greed! From the average American, to the lenders, to Wall Street, to the federal regulators and congress who are suppose to regulate the industry. Also, local governments benefitted from higher tax revenues.
It's time to pay the piper. We need to bail out Fannie & Freddie to prevent being sucked into the abyss.
Going forward, they should regulate income documentation to only full doc. They should only have 30 or 15 year fixed loan products. Loan Officers and Realtors should have extensive classes on ethics.
Marge1,
Your are very right. The cost of illegals to the taxpayor are just beginning. Defaulted mortgages, schooling for their children, free meals, housing subsidy, WIC and other food 'stamps' are only the tip of the iceberg. Just wait until those who haven't contributed to Social Security, demand (and thanks to Calfornia) will get payouts from s system set up long before illegals started amassing in this country. Talk about an econimic meltdown and war in the streets!
Oh, by the way, thanks a lot Los Angeles for MS13 and to the El Savlordians for forming the most widespread, dangerous and harmful gang threat to OUR society. Thanks too, for costing the American taxpayors millions to incarcerate (that's put into prison for those of you in Rio Linda) a disporportionate number of illegals, especially Hispanic.
Of additional note, is the fact that banks have made loans they shouldn't have made to folks of all kinds that didn't deserve them -- did not qualify under traditional rules for home loans. Looks to me as though the banks got greedy and the borrowers got too big for their britches.
In either case of faulty loans to Americans or illegals, and in the case of baby sitting illegals, Calfornia once again has lead the way down the wrong path. Don't ask me to bail your irresponsible butts out of debt.
Funny when liberals rule, there is always a major mess. With Calfornians, liberals, feminist, homosexuals and foreigners in the lead, this country is already on an irreversable path to destruction.
Thanks a lot (that's muchas gracias) to you Calafornians.
'Darned if it does and darned if it doesn't.' All of this talk about the credit crisis as an example of too much government is silly. From my perspective, the regulation of credit and the money supply is a legitimate function of government that has been reduced in part during this extension of the Reagan era.
Stop and think, even the conservative financial community that dominates Wall Street is calling for us to re-think and tighten the regulations governing our financial institutions.
Appropriately, Americans believe in limited government. But please, it is too simple to pose the issue as one of 'any government is bad government.'
R. William Holland
Board Chair, United Professionals and author
Are There Any Good Jobs Left? Career Management in the Age of the Disposable Worker.
Can't anyone on this board spel wright?
And the stupid democratic party is condoning.
What's America crying about today, folks? So what if your government sold you out and your nation is slipping away from under your feet as we speak! Get a grip, Charlie! We don't need jobs, health care and the like. We are Americans. Forget the banks too. Without a job, you are not going to have a need for banking services. Half the population now living in America are illegals. Get use to it or move to a third-world nation and get a real job while your there.
America is a place where no-care health care lives. Organized crime is in and law-abiding citizens are a thing of the past.
Is anyone else here alarmed by the knee-jerk reactionaries blaming immigrants, and demanding more government?
First of all, this problem was created by collective stupidity. People allowed themselves believe or be persuaded to believe that they could afford loans for homes/cars/other luxury items that they should have known they could not afford. Banks augmented the natural market, to make high yield loans to higher risk applicants seem attractive. Corporations allowed themselves to think these loans, which any amount of inspection would show to be unstable, could be a huge source of cash, forgetting that they were all selling each other renamed shares of the same debt. Government regulatory comities did little or nothing because, as with most government organizations, those in charge of them were too busy reaping the cash from lobbyists hired by the banks and corporations.
Many, many people are to blame for actively taking part in this cycle of idiocy. I'll exempt those who passively did nothing, or allowed themselves to be convinced that the kind of massive growth our economy showed was natural, since even if they had cared or bothered, their representatives would have been likely to do nothing.
Still, this has little to nothing to do with illegal immigrants, or needing more government. This has to do with a perpetuated system of bad and fake credit, and a bloated bureaucracy that WE allowed to become corporatist ever since the 1930s. The kind of xenophobia evinced on these pages is exactly like that which stirred around the Alien and Sedition act, the instillation of Fascism in Italy, and countless genocides world wide.
PLEASE, folks, pick up a damn history book and educate yourselves.
For those who immediately but the blame on the immigrant, illegal or not, please provide statistics or solid evidence. Groundless attacks just make no sense. I am an immigrant from Taiwan and my house if fully paid for. This big borrowing and enjoy before you even have it only exist in US. I remember trying to borrow to purchase my first house. Since I did not believe using credit card to purchase, I was penalized for not having any credit reference and I had to pay higher monthly due to higher interest.
The whole problem is credit become too easy, Wall street purchase the sub-prime without even question so that investor can make bigger $. This prompted the loan brokers to get people to borrow with hardly any requirement. Just think, how many people you know were in the loan business during the past 10 years? Most people have no clue on how much they could afford and just focused on that large house they want. This also prompted to make the housing price way beyond it really should. Greedy wall street investors, greedy banks, greedy loan brokers, greedy home builders, greedy contractors and.. all take advantage of the stupid yet spoiled American public. In the mean time, politician takes credit for putting so many American public in to their 'own house' ! Ah, the good old rich American image!
We are losing our grips of reality. Don't blame others please.
Stupidity and ignorance make Americans predictable. Fat, lazy people can only blame others for their wealth and health precarious condition while others more industrious take the tab. China is still financing but not for long - the cycle has run its course & when the flow stops, very few in the US will be prepared.
I bailed out of USD and moved into Gold mid 2005; I am presently borrowing more USD from more US banks to purchase more Gold... I'll repay these loans when the dollar has been inflated (devalued) to oblivion... Thank you Ben for keeping interest rates so low and thank you Hank for your 'strong dollar policy'.
When the dust clears, I'll use the gold to purchase a bigger part of America; by then, the constitution will be more respected, the consumers' sons will be citizens again and for better or worse, Iraq will self determine its future.
in the meantime, bye bye Miss American pie... It is winter, time to conserve!
Rational,
You left out a key point, that most omit or gloss over. The main reason the mortgage companies and other financial institutions got in so deep was that they thought they had controlled their risk. They were using derivatives (credit default swaps) as insurance against losses due to bad debts. The reason they could do that was that former Senator Gramm (now McCain's campaign top economic advisor!) was responsible for a bill to exempt those types of derivatives from regulation, shortly before he left to become a VP of UBS (who then got into huge trouble with...um...derivatives). Insurance is regulated, so the financial companies couldn't have gone down the path as they did, if they had been using 'actual' insurance products to control risk.
Now that this huge transfer of wealth has taken place (i.e., sucking the equity out of most middle class homes), the middle class is shrinking as the manufacturing losses push the remaining manufacturing workers back to working poor status, and congress tightened bankruptcy laws (generously drafted for them by the banking and financial lobbies), this country is in for a huge transition. This is about to become a nation of indentured servants.
All I can say is wow! The level of ignorance of some here is truly amazing.
Hank - It seems the President, the Governor of California, the House and (until recently) the Senate were all controlled by Republicans for these last many years. I guess those Republicans are the 'Liberals' you're talking about.
This mess was caused by widespread greed, left unchecked by government regulation and private sector 'rating agencies'. The banks, brokers, builders, real estate agents, and even ordinary Americans were greedy beyond the pale. Foreigners had little to do with it except by providing sources of lending (China buying US treasuries) while all our local capital was chasing the madness of this real estate bubble.
If you're looking for someone to blame, look in the mirror.
You guys are a nation of absolute nuts. You claim what a wonderful country you are under one god .... while from European perspective all you really care about is how to make a quick buck screwing your neighbor. Hell with you
if you don't have health care as long as I have it,same goes for the
roof over head, minimum wages,education...Funny thing is, it's costing you
so much more in long run in lost human resources and unnecessary suffering that you could probably provide many of those for free and still save money.
I'm afraid the whole situation requires a more rational approach to be understood.Historically the current situation is the result of the Reagan era,when everything pertaining to the financial market was deregulated ,with the outspoken goal to make credit more widely available for all.The immediate result was a boom indeed.The real estate started booming as cheap credits were made available to a larger public.A secondary result of course is raising prices in the real estate,providing more profit to those that bought early .Buying and selling became a way of living,some of you made big bucks that way.Of course such mechanism can not continue indefinitely .Real estate is also linked to the wider economical conjuncture .As long as housing ifs affordable there is a market .Properties change hands and are a lucrative type of speculation for years,until two problems start to arise;it becomes too expensive to buy a house for the average Joe and so a part of the łarket faes away.For speculators there is also an end as real estate loses it' attraction after a while,prices can not rise endlessly .And so a lot of people pertaining to these categories having borrowed money ,became giants on clay feet ,to be toppled when the first winds start blowing .Illegal aliens have as little to do with that as extraterrestrials of course .But somebody ha to be blamed,and for sure tha banks providing loans without even checking on their clients will not accept the blame .They are now queuing up at the government to get more money .in this high risk game the bank only get the profits,once they start losing they knock at the door from the government and ask for money.In exchange of what ?More control ?I think that is needed badly .
Of course you can leave it ti the republicans to blame the state,the immigrants,the loanes,the general public,congress,etc,etc.But blame tha banks for creating a product that was bound to fail sooner or latr ?No sir,of course not.Blame the clients because they used what was offered to them by the banks...yes sir,this is the republican version of the facts...slightly at odds with reality .
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