IndyMac Bank was a major player in the mortgage scene in the Los Angeles market. They rose to be the nation's number two independent mortgage company before their collapse in 2008. Operating as a bank since 1998, they were seized by the Federal Deposit Insurance Corporation in July 2008.
Deflect Blame
Mike Perry, the ex-Chief Executive Officer of the company was sued by the FDIC earlier today. The suit claims Perry acted reckless and caused 600 million in losses. Perry's attorney, Jean Veta of Covington & Burling, called the lawsuit baseless. In a release to clarify implications of the lawsuit, Benjamin Razi, Covington partner and co-counsel with Ms. Veta, declared: "This lawsuit is another transparent ploy designed to deflect blame away from the FDIC for its own failures."
An Impressive Start
Indy Mac's rise was impressive. Starting as a small subsidiary of Countrywide Home Loans in 1993, Perry guided the company to national prominence. In 1998, the Japanese financial fallout took out many U.S. Companies involved in mortgage lending. IndyMac almost went out, however their parent Countrywide provided an infusion of cash and they were able to rebound. Part of the rebounding strategy was to become a bank or depository.
The company was known as an Alt-A lender and became quite popular by feeding the appetite of thirsty borrowers who were looking for flexible or “make sense” underwriting guidelines, with affordable mortgage products. While there has been much criticism of Indy Mac’s role in the financial meltdown, some supporters say they were only serving a need.
Company was at one time Praised by FDIC
When the F,D.I.C. Took over and Perry was ousted and you only knew it was a matter of time before lawsuits and other actions would follow. Interestingly, as Perry was guiding the company to great success, the FDIC was praising their performance. Either way, the curtain came down on Perry and the company he developed, as he must now deal with another legal action. The FDIC shuttered Indy Mac’s name and was able to locate a group of investors to take over operations. That company is thriving today and is called OneWestBank.
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