Opps looks like FDIC is going to become a bank whether it wants too or not! :eek:
http://www.bloomberg.com/apps/news?pid=20601087&sid=aGrtpwcNNDSU&refer=home
Bair Says IndyMac `Unattractive' to a Potential Buyer (Update1)
By Alison Vekshin
July 30 (Bloomberg) -- Federal Deposit Insurance Corp. Chairman Sheila Bair said IndyMac Bancorp Inc.'s high-risk lending and mortgage losses make it ``unattractive'' and leave the agency needing to strengthen the firm to sell it.
IndyMac's reliance on large deposits arranged by brokers on behalf of their customers and lack of a strong ``core deposit base'' also limit its appeal, Bair, 54, said today in an interview to be broadcast this weekend on Bloomberg Television's ``Conversations with Judy Woodruff.''
``There are a number of things about this institution that, to be honest with you, make it unattractive to a potential purchaser,'' Bair said.
The FDIC took over the Pasadena, California-based lender July 11 and is running a successor institution called IndyMac Federal Bank FSB while seeking a buyer for the failed bank's assets. IndyMac became the third-largest federally insured institution to be seized by U.S. regulators after a run by depositors depleted its cash.
``What we're trying to do now is do what we can to strengthen it, strengthen the asset quality, strengthen the servicing portfolio, so we can sell it off and get a better value, hopefully,'' Bair said.
Bair said July 14 the agency would suspend foreclosures on $15 billion in IndyMac loans to see if they can be modified. The FDIC may take advantage of the housing measure President George W. Bush signed into law today, which includes a program to offer government insurance on some refinanced loans.
``We may be using it ourselves to get some of these loans refinanced into affordable mortgages,'' Bair said.
Restoration Plan
The FDIC will institute a ``restoration plan in the fall,'' increasing the fees it charges banks to insure customers' deposits to replenish agency reserves, Bair said.
Bair and other regulators have said more lenders will fail this year amid loan losses and asset writedowns in the worst housing slump since the Great Depression. Seven banks have failed so far this year, following three failures in 2007 and no failures in 2005 and 2006, according to the FDIC Web site.
``Historically banks fail every year,'' Bair said. ``And we're seeing a pickup now in that because of the more challenging credit environment.''
The agency's troubled bank list increased to 90 institutions in the first quarter from 76 in the fourth quarter of 2007, the FDIC reported in May.
While 13 percent of those banks eventually fail, ``most of them we do eventually nurse back to health,'' Bair said.
Federal supervisors should have done more to prevent the lax lending that spurred the housing crisis, Bair said.
``I think the bank regulators should have done more to step up to the plate, to raise their hands, and say, `You know, this has got to stop,''' Bair said.
The FDIC is a Washington-based bank regulator that insures deposits at 8,494 U.S. banks up to $100,000 per depositor per bank and up to $250,000 for some retirement accounts.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aGrtpwcNNDSU&refer=home
Bair Says IndyMac `Unattractive' to a Potential Buyer (Update1)
By Alison Vekshin
July 30 (Bloomberg) -- Federal Deposit Insurance Corp. Chairman Sheila Bair said IndyMac Bancorp Inc.'s high-risk lending and mortgage losses make it ``unattractive'' and leave the agency needing to strengthen the firm to sell it.
IndyMac's reliance on large deposits arranged by brokers on behalf of their customers and lack of a strong ``core deposit base'' also limit its appeal, Bair, 54, said today in an interview to be broadcast this weekend on Bloomberg Television's ``Conversations with Judy Woodruff.''
``There are a number of things about this institution that, to be honest with you, make it unattractive to a potential purchaser,'' Bair said.
The FDIC took over the Pasadena, California-based lender July 11 and is running a successor institution called IndyMac Federal Bank FSB while seeking a buyer for the failed bank's assets. IndyMac became the third-largest federally insured institution to be seized by U.S. regulators after a run by depositors depleted its cash.
``What we're trying to do now is do what we can to strengthen it, strengthen the asset quality, strengthen the servicing portfolio, so we can sell it off and get a better value, hopefully,'' Bair said.
Bair said July 14 the agency would suspend foreclosures on $15 billion in IndyMac loans to see if they can be modified. The FDIC may take advantage of the housing measure President George W. Bush signed into law today, which includes a program to offer government insurance on some refinanced loans.
``We may be using it ourselves to get some of these loans refinanced into affordable mortgages,'' Bair said.
Restoration Plan
The FDIC will institute a ``restoration plan in the fall,'' increasing the fees it charges banks to insure customers' deposits to replenish agency reserves, Bair said.
Bair and other regulators have said more lenders will fail this year amid loan losses and asset writedowns in the worst housing slump since the Great Depression. Seven banks have failed so far this year, following three failures in 2007 and no failures in 2005 and 2006, according to the FDIC Web site.
``Historically banks fail every year,'' Bair said. ``And we're seeing a pickup now in that because of the more challenging credit environment.''
The agency's troubled bank list increased to 90 institutions in the first quarter from 76 in the fourth quarter of 2007, the FDIC reported in May.
While 13 percent of those banks eventually fail, ``most of them we do eventually nurse back to health,'' Bair said.
Federal supervisors should have done more to prevent the lax lending that spurred the housing crisis, Bair said.
``I think the bank regulators should have done more to step up to the plate, to raise their hands, and say, `You know, this has got to stop,''' Bair said.
The FDIC is a Washington-based bank regulator that insures deposits at 8,494 U.S. banks up to $100,000 per depositor per bank and up to $250,000 for some retirement accounts.
