Pasadena, Calif.-headquartered IndyMac Bancorp. says its savings and loan, Indymac Bank, will be eliminating nearly all of its loan production after experiencing a series of losses and failing to raise sufficient capital.
‘A consequence of falling below well-capitalized is that we are no longer permitted to accept new brokered deposits or renew or roll over existing ones, unless we get a waiver from the FDIC,’ the company explains in a letter to shareholders. ‘While we have submitted a waiver application, it is uncertain as to whether such a waiver will be granted.
‘As a result of the above, we have made the difficult decision, effective July 7, 2008, that we will no longer accept any new loan submissions or rate locks in our retail and wholesale forward mortgage lending channels, except for our servicing-retention channel,’ Indymac continues.
The company plans to reduce its workforce from 7,200 to roughly 3,400 or so over the next couple of months, which is projected to reduce operating expenses by roughly 60%. In conjunction with these actions, Michael W. Perry, chairman and CEO, notes in the stakeholder letter that he has requested that the board of directors reduce his base salary by 50%.
Source: IndyMac Bancorp