The WSJ reports that on Friday IndyMac bank was seized by Federal Regulators, and will re-open Monday being operated by the FDIC.

  • The company was set up as part of Countrywide in 1985, but was spun off as an independent company in 1997.
  • Last year IndyMac was the 9th largest US mortgage lender.
  • The company focused on two of the riskier parts of the mortgage industry: jumbo mortgage loans and Alt-A mortgages for lenders with blemished credit histories
  • IndyMac reported their first annual loss in its 23-year history this past February, and within 6 months the company went under.

IndyMac also operates Financial Freedom, a leader in the reverse mortgage space. Toronto-based Manulife made an offer for Financial Freedom 8 days before the Office of Thrift Supervision shut down IndyMac, but IndyMac CEO Mike Perry held out and shareholders got nothing. Given government ownership of the company and the general lack of confidence in the real estate market Financial Freedom and other assets may soon be sold off at fire-sale prices.

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