Former CEO: Michael Perry
Status: Bankrupt since July 2008
Before IndyMac Bank collapsed in July 2008, it was the biggest savings and loan association in Los Angeles and the seventh largest mortgage originator in the USA. In 1985, David Loeb and Angelo Mozilo established IndyMac Bank as a Countrywide Mortgage Investment that used methods of collateralizing Countrywide Financial loans that were too large to be purchased by Freddie Mac and Frannie Mae.
IndyMac Bank became an independent company that was held by Michael Perry, who stayed on as the CEO of the company until its declaration of bankruptcy in 2008. Although IndyMac had incorporated “Mac," it had always been operating privately with no connection to the government at all, unlike other mortgage corporations like Farmer Mac and Freddie Mac.
Indymac Bank became the Thrift and Mortgage Bank in July 2000. It provided services through lending for development, improvement and purchasing of single-family housing and secondary mortgages. At that time, IndyMac careers sprouted, giving many individuals various job opportunities. The IndyMac Bank culture was lively and dynamic, supporting families with their housing mortgages.
According to the investigation, the bankruptcy of IndyMac Bank occurred because of its ineffective business strategy in originating and securitizing large-scale loans. The growth of IndyMac was very aggressive. In a few years alone, it originated more than $90 billion mortgages, making it as the seventh and ninth largest savings and originator of mortgage loans in the entire US. IndyMac’s reliance on huge loans from Federal Home Loan Bank, along with their brokered deposits, pulled them down rapidly during the fall of the mortgage market in 2007.
According to former employees, working at IndyMac was indeed an excellent opportunity. They had worked with lots of good people and enjoyed the work environment. IndyMac benefits included a complete health and well-being support for dental, vision, medical, prescription drugs. Employees were given flexible spending accounts for dependent and health care. There were various performance rewards too. IndyMac employees were also provided with financial security programs such as a 401K plan, disability insurance, accidental death and dismemberment insurance, basic life insurance and business and travel accident insurance. For their personal and professional development, they were given in-house development and training programs with tuition reimbursement. IndyMac bank also had established community outreach activities like a donation-matching program.
IndyMac Bank issued a statement on July 7, 2008 that it was unable to increase capital based on its May 12, 2008 quarterly income reports. They were notified that it could no longer be considered well-capitalized bank by bank and thrift regulators. 3,800 employees lost their jobs. On July 31, 2008, IndyMac Bank filed for Chapter 7 bankruptcy.
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