IndyMac to Be Sold to Group of Equity, Hedge Funds, NYT Reports
By Margaret Chadbourn and Samantha Zee
Dec. 28 (Bloomberg) -- IndyMac Bancorp Inc., which failed in July after a run on its deposits, is close to being sold by the government to private equity and hedge fund firms, the New York Times reported, citing people briefed on the deal.
The buyers are J.C. Flowers & Co. and Dune Capital Management, New York-based private equity firms, and the hedge- fund firm Paulson & Co., the unidentified people told the newspaper. The sale by the Federal Deposit Insurance Corp. would be among the first involving unregulated firm buying a bank- holding company, the Times said in its Dealbook section.
The group would buy all of Pasadena, California-based IndyMac, including 33 branches, its reverse-mortgage unit and a $176 billion loan-servicing portfolio, the newspaper said. An announcement could be made as soon as tomorrow, the Times said.
“We have not made an announcement on a buyer outside of saying that we expect to make one by year’s end,” FDIC spokesman David Barr said in an e-mail today. The FDIC seized the lender in July and had managed a successor called IndyMac Federal Bank FSB while seeking a buyer. Unpaid mortgages left the lender short of cash, triggering a run on deposits that drained $1.3 billion in 11 days ending with the U.S. seizure on July 11. The bank was among 25 to collapse this year amid losses from mortgages. IndyMac’s failure will cost the FDIC’s deposit insurance fund about $8.9 billion, the agency has said. FDIC in November made it easier for investors, including private equity and hedge funds, to bid for deposits and assets of failing lenders. Changing the rule on bank ownership will help ensure “failing institutions are resolved in a manner that will result in the least cost to the Deposit Insurance Fund” by marketing assets to “known, qualified and interested bidders,” the agency said at the time. J.C. Flowers had raised $2.5 billion this year for a buyout fund that targets banks and other financial firms. In August, J. Christopher Flowers, the firm’s founder, won approval to buy First National Bank of Cainesville in rural Missouri. The bank, near the Iowa border in a town of 400 people, has $14 million in assets and could be used as a vehicle to buy other troubled or failing institutions. Paulson’s $13 billion Advantage Plus fund, his largest fund that’s designed to bet on takeovers, restructurings and other corporate events, rose 33.5 percent this year through November, Bloomberg data showed. John Paulson in September was considering buying newly issued shares or convertible bonds in financial institutions that need capital, the Financial Times reported Sept 8. Dune was co-founded by Steven Mnuchin after he left Soros Fund Management LLC in late 2004. Mnuchin was head of a unit at Soros that provided financing, including mezzanine, asset-based and real-estate loans. The team also traded distressed debt. Prior to joining Soros in 2003, Mnuchin, 46, was vice chairman of ESL Investments Inc., the hedge-fund firm run by Edward Lampert. ESL is the largest holder of Sears Holdings Corp., on whose board Mnuchin sits. Before ESL, Mnuchin spent 17 years at Goldman Sachs Group Inc., becoming a member of the firm’s management committee. He retired from Goldman at the end of 2002.
To contact the reporters on this story: Margaret Chadbourn in Washington at mchadbourn@bloomberg.net; Samantha Zee in Los Angeles at szee@bloomberg.net. Last Updated: December 28, 2008 19:14 EST
http://www.youtube.com/watch?v=ZZNnHBlwzss
Tuesday, December 30, 2008
Wednesday, December 17, 2008
Hope for Homeowners a Failure?
This is the best story I have seen reported by the news in a long time. After all the attention the foreclosure crisis was getting and with the annoucement of the Hope for Homeowners, is it even working? According to World News tonight, it is a failure. Until the banks and their investors are willing to write down mortgages, foreclosures will still be on the rise. One man in the video said it best, "We need help, not hope...." Check it out.
http://www.msnbc.msn.com/id/21134540/vp/28285183#28285183
http://www.msnbc.msn.com/id/21134540/vp/28285183#28285183
Indymac Foreclosure Fix - Do you qualify?
Check out this video! This is Tony Ebers speaking to Lisa Myers of NBC regarding their loan modification program implemented by the FDIC.
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