Indy Mac Alive But Not Kicking
Indy Mac is offering a feeble excuse for the large decline in mortgage loans being originated.
From Reuters:
IndyMac last year shifted its business to loans eligible for purchase by the two government-sponsored enterprises from the riskier, “Alt-A” type, characterized by loans to borrowers that fall short of income documentation or down payments. The move was made as investors in Alt-A and subprime loans pulled their support as defaults soared.
The GSEs, which posted larger-than-expected losses in the third quarter, have raised fees on loans they guarantee and added a surcharge on loans for higher-risk borrowers.
This means that taking out a normal loan is often harder than acquiring a second mortgage for many folks. Since lenders don’t want to issue loans with any degree of risk, many are being declined when they attempt to purchase a home.
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