Financial Solution News

IndyMac will cover 50% of uninsured deposits as IndyMac Federal Bank.
The government is stepping in to support IndyMac. Having just changed its name from IndyMac Bancorp after it was seized Friday. The FDIC has assumed control saying it will cover 50% of uninsured deposits and fully insure all up to $100,000, which is normal.
John Bovenzi, the FDIC COO says there’s probably no bank in the country that has access to greater capital and liquidity than Indymac Federal Bank. He also states the FDIC expects to sell it in the next 90 days.
Because Charles Schumer has loose lips, IndyMac Bancorp became the second biggest federally insured financial company to be taken over by regulators.

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“IndyMac has announced they will no longer accept any new loan submissions or rate locks in either retail or wholesale, and are closing their “forward” mortgage business.”
Citing regulatory pressure to maintain its capital levels, IndyMac is shifting away from and shutting down much of its forward mortgage origination business to focus on its Reverse Mortgage unit, Financial Freedom, according to a letter from chief executive Mike Perry posted on IndyMac’s corporate blog.
IndyMac said as of July 7 it would no longer accept any new loan submissions or rate locks in its retail and wholesale forward mortgage lending channels, except for its servicing retention channel and would cut roughly half its staff of 7,200 over the next couple of months.
The company said it plans to honor all its existing rate locked loans and continue to fund them.
“While the managers and employees in these units have worked incredibly hard, these […]

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It is not just Bank of America that is reeling from subprime problems, the largest banks in the world have posted $290 billion of credit losses, since the beginning of 2007.

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We have seen $90 billion of writedowns to date. Standard and Poor’s is saying that you can super size that order. Writedowns total losses are expected to be $265 billion or more.
So far, Wall Street has been shouldering the brunt of the losses. S&P says the next losses will affect smaller financial institutions including regional banks in the U.S., credit unions, and lenders in Europe and Asia.

Just yesterday, UBS, the biggest Swiss bank, wrote down $14 billion of assets.

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Countrywide Financial Denies Speculations of Bankruptcy. 1-8-2008

It was a very rocky day for shares of Countrywide Financial. A lot of news and speculation. This all started this morning around 11:00, 1-8-2008. The stock went straight down. We called around, and it was tough to find people who knew what was going on. We were able to track down a number of the traders who told us this was living on bankruptcy speculation, and it kept going down. The stock was down by as much as 25%, and early in the afternoon, trading was halted. Countrywide put out a statement saying there is no truth to this, and the stock came back, but it is still down almost 20%.

Merger and Acquisition News: Bank of America Buying Countrywide Financial. 1-10-2008.
According to Wall Street Journal, Deal with Bank of America and Countrywide Could Come Soon

What is going on now is that […]

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Alan Greenspan Was Incompetent And Ben Bernanke Only Knows Academics - Not Reality. Barron’s Economics Editor Gene Epstein looks at the Federal Reserve’s role in the housing crisis.

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Bush Praises Subprime Mortgage Strategy
President Bush says it is “going to take a while to work through this mortgage bubble,” but that his administration does have a strategy for helping subprime borrowers refinance or restructure their mortgages.
Bush said in a speech on the economy that the Treasury Department has worked with mortgage servicers so borrowers don’t “get pinched as their interest rates reset”. He also noted that the Federal Housing Administration is helping to refinance subprime borrowers and could do more if Congress passes an FHA modernization bill. (The Senate just passed such a bill, which now has to be reconciled with the House version).
Former Federal Reserve Board Chairman Alan Greenspan has suggested that the federal government could provide cash assistance for distressed homeowners who can’t afford their mortgage payments.
Mr. Bush stressed in his speech that he is against bailouts for lenders, speculators, and people who bought a house […]

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A Worsening Outlook: Bank of America. Rising Credit Losses, Problems in Credit Cards and Home Equity, Writedowns on CDOs “Unknowable”, Charge-Offs Will Rise Next Year; CEO Ken Lewis Will Face More Problems as Consumer Spending Slows; Some Say Bank of America Stock Will Outperform the mortgage industry.

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$9.76 billion from Singapore; $1.75 billion from Middle East; Subprime mortgage collapse costs banks, securities firms $76 billion in losses; Federal Reserve options may include bigger welcome at discount window.

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