FDIC Plans Sale of IndyMac: Report
The Federal Deposit Insurance Corp. is set to announce the sale of IndyMac Federal Bank, perhaps as early as Wednesday morning, according to a published report Tuesday evening. The FDIC has been managing the banking and mortgage servicing operations of the Pasadena-based lender since the bank was siezed in mid-July. The American Banker, citing unnamed sources, said that officials were ready to announce a sale, although it's unclear if the bank would be bought by one firm or sold off in pieces. The FDIC has been receiving bids for the lender's operations for months now; while one source speculated a single buyer may yet emerge, other sources have suggested it's far more likely the bank will be sold off in parts. Officials at the FDIC could not immediately be reached for comment late Tuesday evening, by the time this story was published. For Bair, the sale of IndyMac's servicing portfolio might be something of a bittersweet outcome; the FDIC's aggressive management of troubled loans on the Alt-A lending giants servicing books has propelled her into the national spotlight and into the center of the debate over how to best manage a growing number of troubled mortgages. She has pushed for aggressive modification programs, most recently pushing for the U.S. Treasury to use funding under the Troubled Asset Relief Program to insure redefault risk on mortgages modified under a mass-modification program she had instituted at IndyMac. Key legislators, including House Financial Services Committee chairman Barney Frank (D-MA) have said they expect the next round of $350 billion in the $700 billion TARP program to be used for some sort of direct intervention designed to help troubled homeowners. For the FDIC, the sale may also help lower the cost of the thrift's collapse, American Banker reported; it's unclear how that might be the case, or what value investors placed on the thrift's assets. IndyMac held the nation’s 8th largest residential mortgage servicing portfolio, at $200.7 billion by the end of the first quarter, according to statistics compiled by Inside Mortgage Finance. The agency has estimated IndyMac’s failure will cost $8.9 billion to the deposit insurance fund. Write to Paul Jackson at firstname.lastname@example.org.