IndyMac Bank said late yesterday it was laying off 400 workers, or 4 percent of its workforce, in response to the downturn in the mortgage markets -- the latest proof yet of trouble in the Alt-A marketplace. On a company blog, The IMB Report, CEO Mike Perry said that industry conditions continue to be "tough" and noted a few key items about IndyMac's performance:
Industry loan volumes and profit margins continue to be under pressure, and our dollar loan volume was down 12% in the second quarter compared to the first quarter. Furthermore, our volume in terms of loan units was down by 17% because we have eliminated the 80/20 piggyback product (which requires the processing of two loans in each transaction) in favor of first lien higher-LTV programs with mortgage insurance.
Keep in mind that we're talking about Alt-A programs here -- and that IndyMac just said it's eliminated the 80/20 Alt-A loan.