Business NEWS
A review on IndyMac anf IMB Management Holdings!
By Amarendra Bhushan for CEOWORLD Magazine Updated:January 3, 2009
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Hope one day we won’t see “FDIC has found buyer for FDIC”. Funny how it is so vague how much capital the buyer will “inject”.
A group of private investors have agreed to buy for nearly $14 billion the collapsed home loans specialist IndyMac Bank, the third-largest bank to fail since the US government began insuring deposits in 1934.
The group is headed by Steven Mnuchin, chairman of Dune Capital Management, who will serve as chairman and chief executive of a holding company for IndyMac, the Federal Deposit Insurance Corp. said on Friday.
Terry McLaughlin, a banker who has worked at Merrill Lynch Bank & Trust and Fleet Bank, will be the president and CEO of the new thrift, which will inherit IndyMac’s 33 branches, $6.5 billion in deposits and $27 billion in assets, including a troubled $16-billion portfolio of loans.
Uninsured IndyMac depositors will have to wait to see how much of their losses they may recover, the FDIC said. Those depositors have already been repaid 50 percent of the $541 million in uninsured funds that the FDIC determined was held in IndyMac accounts.
IndyMac in 2007 was among the 10 largest US mortgage lenders and customer-service companies, with about 10,000 employees. It currently employs about 2,000, including roughly 300 in its branches and several hundred each in its administrative operations and the reverse-mortgage business.
IndyMac’s failure came after years of rapid expansion during the housing boom. From June 2005 through March 2008, the assets on IndyMac’s books jumped from $18 billion to $32 billion, fuelled by variable-rate loans made without verifying the finances of borrowers, who often were allowed to pay so little each month that their loan balances rose.
Total lending by the Pasadena savings and loan firm was far greater: IndyMac currently serves as the servicer on $157.7 billion in loans for other owners, mainly mortgages it had made and then sold.
The only bank failures as large as IndyMac’s were those of Chicago’s Continental Illinois National Bank & Trust, which had $40 billion in assets when it collapsed in 1984, and Stockton, California-based American Savings & Loan, which had $30 billion in assets when it failed in 1988.
Steven Mnuchin- chairman of Dune Capital Management
George Soros- billionaire
Michael S. Dell- Dell Inc. founder
J. Christopher Flowers
John Paulson
Investors in the partnership include five private equity firms or hedge funds:
J.C. Flowers & Co.
Stone Point Capital
Paulson & Co.
a fund controlled by billionaire George Soros’ Fund Management
a fund controlled by Silar Advisors LP
Dune Capital was founded in 2004 by former Goldman Sachs Group Inc. partners Mnuchin and Daniel Niedich.
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