IndyMac Bancorp, Inc. said Tuesday morning that “panic market conditions” surrounding mortgages have turned the capital markets onto their head, and that as a result the thrift would likely miss its first quarter earnings guidance. The bank had originally forecast a net loss of $38 million for the quarter in an investor presentation on February 12. In a filing with the Securities and Exchange Commission, IndyMac noted that “spreads on everything” had reached “near all-time historic levels,” and that the Pasadena-based thrift could not estimate the effect of market turmoil on its MBS portfolio. “Spreads between Treasuries and other instruments, in particular, non-GSE mortgage assets, are difficult to ascertain, given the fact that there are virtually no new non-GSE mortgage securities issuances and the only resale activity is a handful of distressed sales,” the company said in its filing. “As a result, the financial impact of this spread widening on Indymac is difficult to estimate at this time, but it is expected to have a negative effect on the value of IMB’s MBS portfolio.” Seventeen percent of IndyMac’s MBS portfolio is classifed as “trading” for accounting purposes, which means that write-downs to this portion of the portfolio will directly impact earnings for the quarter. The thrift said 86 percent of its total MBS portfolio was comprised of Alt-A-backed securities; this securities class, in particular, has been roiled in the past week amid rumors that UBS AG dumped more than $24 billion of investment-grade Alt-A RMBS earlier this month. For more information, visit http://www.indymac.com. Disclosure: The author held no positions in IMB when this story was originally published. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade.
IndyMac Warns on 2008 First Quarter Guidance, Cites “Panic”
Most Popular Articles
Latest Articles
Real estate farming: Become the go-to agent in your area using these tips, tools & strategies
Learn how to generate a steady pipeline of real estate leads and clients in your area using this proven approach.
-
Zillow believes the evolution of the industry will only help it grow
-
All parties have settled the Sitzer/Burnett suit, so what’s next?
-
Longtime reverse mortgage leader Scott Norman appointed CEO of Texas MBA
-
Rates at 7% attract different types of borrowers, forcing lenders to rethink profit strategies
-
The unchanging