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INDYMAC CRASH!!!!!!

By
Real Estate Agent with Keller Williams

WHAT HAPPENED TO INDYMAC? AND WHAT HAPPENS NOW????????

1. What happened?

 In my opinion, it isn't the housing markets fault for Indymac failing and other banks like them. They were a major player in the mortgage market without a doubt... However, banks hire investment analyzers to choose what they invest in to create a profitable rate of return for their clients. The investors for this bank chose to put too many of their eggs in the high risk loan market. That is what happened.

See the original image at thetruthaboutmortgage.com           IndyMac

2. What happens now?

Once again in my opinion, and I am not an economic advisor to anyone but myself, this is a good sign for the future..... Banks like this made it too easy for too many people. Loans were being made to people that had no business buying a 1976 Pinto on credit, much less a 4000 sqft. mini mansion.... Don't get me wrong, there is a need for banks to make big loans and generally they are more risky. However, the banks should be responsible in there qualifying terms AND their own portfolio should have a conservative counter balance to prevent something like a this from happening to them.

Now, I am no expert, and I would love to have someone's opinion that is..... I have a friend who IS qualified to talk about it and I am going to ask him to comment as soon as I get a hold of him. However, I want to know what you think as well... I hope I learn something new today!

 

Have a wonderful day!!!

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Scott Daniels Florida Real Estate 2.0. Agents Earn 100% Commission.
Florida List For Less Realty, Inc. Broker/Owner. - Cooper City, FL

DY,

What happened?

Greedy lenders,mixed with wall street!

Worse, this isn`t new!

The news has been hanging out there for 6-7 months now...

Who wins? 

Jul 15, 2008 01:01 AM
Dennis Yates
Keller Williams - Prosper, TX

Certainly not the poor souls who trusted them with there life savings....

However, I believe we will all win in the future with a more stable real estate market. Look how far we've come since the depression AND the 80's crash. At least we had the FDIC to cushion the blow this time... 

Jul 15, 2008 01:09 AM
Dick Betts
Dick Betts National Speaker - The Villages, FL
Realtor, Team Leader

My house is with IndyMac, just wondering what will happen to my loan.  Will they sell it, somebody else take it over, the questions grow, I am sure they won't lose it.

Jul 15, 2008 01:10 AM
Dennis Yates
Keller Williams - Prosper, TX

It will probably be sold, so don't think your home free and don't worry about loosing your house..... I just wish I knew which bank was buying the loans up.... Now that will be a good investment to jump in and out of.... BUT more than likely they will be dispersed to several banks. The highest bidders...

Jul 15, 2008 01:13 AM
Hans Iduma
Gaithersburg, MD
Certified Mortgage Planning Specialist

What happened to Indymac Bank is very unfortunate but by and large the mortgage lending is still originating and funding loans. Indymac funded over $10m new loans yesterday and will continue to fund loans even as we transition to a new name in a few days. If you are currently working with Indymac loan officer, not to worry, your loan will be underwritten and funded as usual. We have been assured by the new CEO of Indymac

Jul 15, 2008 01:27 AM
Hans Iduma
Gaithersburg, MD
Certified Mortgage Planning Specialist

Sorry, I caught myself off. We have been assured by the new CEO of Indymac Federal Savings Bank to proceed with business as usual. So, do not be triuble about any current loan that Indymac is processing for you.

Jul 15, 2008 01:30 AM
David Daniels
Owner of FlyersToYou, Inc. and former Top Realtor - Hemet, CA

This is never a popular opinion....especially on a real estate community website (don't bash the flyer guy...I've been licensed for almost 25 years, and was a top agent prior to starting FlyersToYou seven years ago)....

BUT...

It amazes me to watch how quickly we are to blame Wall Street...or individual lenders, or whomever for the mess we're in right now.

None of those loans could'a, would'a, should'a been made if all of us weren't out there selling homes to these people. Yes, I know....I've read responses on all the other posts. It's not OUR job to be a lender. Oh please.

Talk about denial.

Our buyers worked at Walmart...and bought a $479,000 home with no money down, poor credit, and stated income. We all knew what was going on, but how do you turn down a $15,000 commission that's being handed to you so freely??? The simple answer. You don't.

Sure, IndyMac was greedy. They had a product with HUGE demand...and they sold it like crazy. Wall Street's greed found investors for the loans to be sold to. And we used them to make a boat load of money.

It's the age old..."You make your bed..."

I just wonder how long we'll all have to lay in this bed. It's not a very comfortable one, that's for sure.

Dave

Jul 15, 2008 01:31 AM
License Retired
Lebanon, TN

Probably didn't help that New York Senator Chuck "The most dangerous place in America to be is between me and a camera" Schumer released a letter warning that it was about to crash.

Nothing like screaming "Fire" in a crowded bank........

 

Doofus..........

Jul 15, 2008 01:34 AM
David Daniels
Owner of FlyersToYou, Inc. and former Top Realtor - Hemet, CA

Hans,

LOL...with all due respect...how in the world did you post 13 identical comments without hitting the "edit" button???? Perhaps go in and delete all but the last one???

::: taking another sip of coffee :::

Dave

Jul 15, 2008 01:34 AM
Dennis Yates
Keller Williams - Prosper, TX

Thanks all, and I agree with Dave to some extent. However, I believe it's one thing to fund a non-comforming loan, it's another to be absolutely obsurd in your qualifying terms(or lack there of). I can tell you one thing for sure. I don't put a client in the car unless they are prequalified with the lender... not me... 

I may lose commissions, but I will not lose my integrity.

Jul 15, 2008 01:47 AM
David Daniels
Owner of FlyersToYou, Inc. and former Top Realtor - Hemet, CA

Dennis,

I totally understand where you're coming from. However, last year...I knew MANY, MANY, MANY agents who...if they couldn't get their "no verifiable income", no downpayment, and bad credit buyers approved with Lender A....they called Lender B, and C, and D until Lender P ultimately did the loan.

Nowadays, the argument often heard is that it wasn't the agent's fault for Lender P making the loan. I totally understand that. But if that loan goes south and adds to the current market condition which impedes our ability to make as much money now as we did the last 5 years...it's often that same agent who says "Lenders and Wall Street are responsible for putting us in this whole mess, not me!"

Know what I mean?

Dave

Jul 15, 2008 02:19 AM
Dennis Yates
Keller Williams - Prosper, TX

Absolutely.... the one who smelt it, delt it!!

And..... we are all smelling it to some degree...

Another point however!!

I have seen countless foreclosures in my mega mansion area that have holes in the walls of every room from the flat screens...... I bet they had the new furniture with no payments 'til 2009 to match!

I'm glad to have good feedback and not just people looking for ad space....

Jul 15, 2008 02:45 AM