If You’re Struggling With a Foreclosure or Trying For a Mortgage Modification Consider This
The FDIC took over IndyMac in 2008 after a run on deposits led to the second-biggest failure of a federally insured bank in U.S. history. When no buyers emerged, the government had to manage IndyMac until the following March, when most of its operations were sold to the investor group that owns OneWest. They’re led by Steven Mnuchin, a former Goldman Sachs Group Inc. banker, with backing from J. Christopher Flowers‘ private-equity firm, hedge-fund manager George Soros and a fund linked to Michael Dell, the founder of computer maker Dell Inc. (See Bloomberg Article here)
Here are some details of the transaction according to an FDIC fact sheet:
“¢ The FDIC, as Conservator for IndyMac FSB (” New IndyMac”), entered into a letter of intent to sell New IndyMac to IMB HoldCo LLC, a thrift holding company controlled by IMB Management Holdings LP, a limited partnership, for approximately $13.9 billion. IMB HoldCo is owned by a consortium of private equity investors led by Steven T. Mnuchin of Dune Capital Management LP.
“¢ Uninsured depositors will not be receiving an additional claims dividend at this time. (Sorry little people, you get hosed.)
“¢ New IndyMac consists of:
o The retail bank headquartered in Pasadena, CA, with 33 branches located primarily in the Los Angeles MSA with approximately $6.5 billion in deposits;
o A loan portfolio of $16 billion and a securities portfolio of $6.9 billion;
o A servicing platform with mortgage servicing rights (” MSRs”) representing an unpaid principal balance of $157.7 billion; and
o A reverse mortgage platform, Financial Freedom, with $1.5 billion of reverse mortgages and MSRs representing an unpaid principal balance of $20.2 billion.
So for a $13.9 Billion Dollar Price Tag, the fat cats got all those assets described above….sounds like one hell of a deal. Now let’s look at the same FDIC fact sheet to see what ordinary Americans got out of the deal…
IndyMac Loan Modification Program
“¢ Mortgages Eligible for Modification
“¢ Total Modification Offers Mailed to date “” 32,274
“¢ Total Completed Modifications (Verified Income) to date “” 8,512
“¢ Total Additional Verbal Acceptances of Offers to date “” 9,480
Not surprisingly, the Internet is alive with stories and accounts of consumers who get no satisfaction from OneWest/Indymac (Sample here). But instead of focusing on the negative, let’s turn for a minute to see how our friends, the Fat Cats are making out on their Indymac/Onewest purchase. The headline screams, SCREWJOB!
OneWest Bank, formerly IndyMac, reports $182 million in profit
The Pasadena thrift’s report to regulators suggests that a loss-sharing arrangement with the FDIC has been helping it work through its giant portfolio of soured home loans.
(See the LA Times Article here)
So if you’re a consumer trying to get a loan modification or short sale through Indymac/Onewest, too bad. But if you’re one of the handful of private investors who got preferential treatment from the feds and then got the deal of the century on this purchase (comparing assets to purchase price), just party on!
For more information contact Matt Weidner at www.mattweidnerlaw.com