Report says mortgage lenders helped fuel global economic crisis

A new report places failed mortgage lender IndyMac Bancorp Inc. among the top 25 lenders whose subprime loans are largely blamed for triggering the global economic meltdown.

[Am Staff]

I would add to the list of subprime:

The Associates

[Margo from Fargo]

News flash! Anyone out there not already know this?

[DMR]

Maybe this will stop all you stupid high school drop out uneducated bank lenders from passing out your stupid business cards to half the world.

[La Habra Lennie]

Am Staff wrote:

I would add to the list of subprime:
The Associates

The Associates were abosrbed by American Gerneral Finance(AIG)

As were Beneficial and HFC by HSBC

What's dumb is Ameriquest Mtg(AMC) was Long Beach Mtg and had a huge interest in the company. It is two seperate entities but the same scumbags controlled both companies. Roland Arnall (deceased) and Jon Dario.

[Libertarian]

Oh yah? The Federal Reserve had their dirty hands in it as well.

[Patrick Harrison]

I think that the government should force Indymac Federal, as well as all sub-prime and Alt-A loans be changed to normal fixed interest rate loans immediately. I am current on my interest-only 1st mortgage, buit will reset in 2011, and I will probably follow along with all the others who previously defaulted, when the payment becomes much more than my income and budget allow. At that point, I will lose my home in foreclosure, and lose all the interest I paid over a 6 year period, which will total at that time,$93,000. Almost half what the cost of the house was when purchased. This is not right! I cannot even sell the house to get out as it has gone down in value from 242,000 at purcash, to 150,000 current value. People who think this situation has anything to do with being iresponsible on my part is just out of touch with reality. I did not buy something that I can not afford. Reality is, the bank sold me something that they later, increased the price on to a point that it is no longer affordable. JUST LIKE OUR CREDIT CARD COMPANIES! GREEDY GREEDY GREEDY! That's all it is, and should be illegal.

[Former lender]

The reporter, Kevin Smith, continues to dredge up old news in an effort to criticize IndyMac. After Senator Schumer's irresponsible public letter was released in June 2008 (probably to reward his campaign contributors who had shorted the company stock), the LA times ran a short article on page 3 of the business section.
However, Kevin Smith and the star news ran a front page headline in bold print asking "IndyMac to collapse?" This article actually contributed very heavily to the depositor run on the bank that ensued. Mr. Smith and the Star News fueled the depositor panic that accelerated the demise of IndyMac. Without this irresponsible journalism, other solutions could have been developed to allow IndyMac to survive and to prevent any losses of the uninsured depositors. Only two months later, the FDIC increased deposit insurance limits to $250,000 and created the TARP to bailout hundreds of other financial institutions. If Mr. Smith had not helped create this depositor panic, the outcome could have been different.
Certainly IndyMac made many risky loans to borrowers who ended up defaulting, however, this paper and this reporter also contributed to the depositor losses through their irresponsible journalistic efforts.

[big mikey]

I cant believe you idiots are stupid enough to blame the Democrats or the Liberals for this economically breakdown. You should really start with your beloved Ronald Regan Economic trickle down bullcrap policy...thats were it all started.

[La Habra Lennie]

Didnt Vote for Be Oh wrote:

Before the Democrats' affirmative action lending policies became an embarrassment, the Los Angeles Times reported that, starting in 1992, a majority-Democratic Congress "mandated that Fannie and Freddie increase their purchases of mortgages for low-income and medium-income borrowers. Operating under that requirement, Fannie Mae, in particular, has been aggressive and creative in stimulating minority gains."

The Dems don;t control Wall Street the GOP does, Come on now.

NO Fannie Mae or Freddie Mac (AKA HUD)Loans were ever "Sub-Prime" or would be able to qualify for these government loans, Most of the Sub-Prime Mortgages and the bank failings are the result of Wall Street big wigs and Securities Brokers looking the other way to make a quick buck, since these risky loans were bundled up as AAA securites and were paying ludicrous returns to investors, The demand was booming and CDO's were selling by the billions, Then when loans started to go delinquent and Banks/Mortgage Originators were required to buy back these securities(Default Swaps) This killed most Mortgage Co's because they could not generate enough liquid to cover their losses (Since no one was buying CDO's anymore), The bottom fell out and all heck broke loose and caused the mess were in now. It's easy to say this began with HUD but the reality is it began with the lax oversight of Mortgage Co's that cared only about the short term. What caused Fannie Mae & Freddie Mac to go under were the eased restrictions that were put in place in a panic to get a large amount of the Sub-Prime mortgages converted into HUD fixed rates to benefit Wall Streets numbers, The previous administration is to blame for this. I worked for Ameriquest Mtg aka Long Beach Mtg aka Long Beach Bank, before the big boom, Loans were underwritten for the sole purpose of making a buck, Period. It was wrong (That's why they got hit with a $382M Settlement-Predatory Lending(Nothing to do with HUD))and that's why I got out working for them. As a matter of Fact Roland Arnall was assigned by GW as the ambassador to the Netherlands! Because he gave GW a truck load of cash......Don't blame this on HUD, They were vitimized as well.

[La Habra Lennie]

Patrick Harrison wrote:

I think that the government should force Indymac Federal, as well as all sub-prime and Alt-A loans be changed to normal fixed interest rate loans immediately. I am current on my interest-only 1st mortgage, buit will reset in 2011, and I will probably follow along with all the others who previously defaulted, when the payment becomes much more than my income and budget allow. At that point, I will lose my home in foreclosure, and lose all the interest I paid over a 6 year period, which will total at that time,$93,000. Almost half what the cost of the house was when purchased. This is not right! I cannot even sell the house to get out as it has gone down in value from 242,000 at purcash, to 150,000 current value. People who think this situation has anything to do with being iresponsible on my part is just out of touch with reality. I did not buy something that I can not afford. Reality is, the bank sold me something that they later, increased the price on to a point that it is no longer affordable. JUST LIKE OUR CREDIT CARD COMPANIES! GREEDY GREEDY GREEDY! That's all it is, and should be illegal.

Pat, I also have IndyMac as my lender, When I applied for my loan I did not listen to a broker or a realtor for advice, I knew what I wanted a fixed rate, knew what I could afford now and later down the line and made sure when I signed loan docs they said what I wanted, I decided on a 15 year fixed, I didn't fall to the hype of the market, It was artificial, It just didn't make sense. I knew how much the payment was with and with out tax and insurance, My house was appraised at $950K at the time and now has proably lost about $300K of that, Do I care that I lost all that equity, Not really because I do not plan on selling my home, I never agreed the home was worth that much and It's all on paper. Will it go back up, Sure in time, It always does, But now at least it will appreciate at a normal slow pace. No one made you sign loan docs, No one made you agree to the terms put forth in front of you and If you act now, You can have IndyMac convert your mortgage to a consistant payment, But you also must realize that the payment may actually be higher than what you pay now unless they forgive some of your debt, The banks are under tremendous pressures to assist people, You can do it yourself and don't pay anyone who says the negotiate your loan (That's a crock of turds)
They may say we can't help, But you have to write lots of certified letters and document what you are doing. You can have a lawyer look at your docs to see if you were misrepresented in any way, If this is true and you default they may not be paid by the Mortgage Insurance Co. and will be willing to assist you.(This is only if you have Mtg Ins) Otherwise document and send letters, Leave a paper trail that you have been attempting to contact them for a loan mod, Eventually they will have to do something.

[La Habra Lennie]

Former lender wrote:

The reporter, Kevin Smith, continues to dredge up old news in an effort to criticize IndyMac. After Senator Schumer's irresponsible public letter was released in June 2008 (probably to reward his campaign contributors who had shorted the company stock), the LA times ran a short article on page 3 of the business section.
However, Kevin Smith and the star news ran a front page headline in bold print asking "IndyMac to collapse?" This article actually contributed very heavily to the depositor run on the bank that ensued. Mr. Smith and the Star News fueled the depositor panic that accelerated the demise of IndyMac. Without this irresponsible journalism, other solutions could have been developed to allow IndyMac to survive and to prevent any losses of the uninsured depositors. Only two months later, the FDIC increased deposit insurance limits to $250,000 and created the TARP to bailout hundreds of other financial institutions. If Mr. Smith had not helped create this depositor panic, the outcome could have been different.
Certainly IndyMac made many risky loans to borrowers who ended up defaulting, however, this paper and this reporter also contributed to the depositor losses through their irresponsible journalistic efforts.

I agree, It's unfortunate that Perception is everything in the public eye! In this particular case irresponsible comments by a supposed government leader were the "Straw that broke the ccamel's back."

Good point.