Fab Real Estate Blog: Indy Mac No Longer Funding Loans

Indy Mac No Longer Funding Loans

We had a listing that was supposed to close today.
It's not closing.

Why not?  Because the buyers were obtaining their mortgage financing through Indy Mac. 

It was announced recently that Indy Mac was leaving the mortgage financing business.  But, they said that would fund and close all loans currently in process.

That is no longer the case.  As of yesterday afternoon, we were told that Indy Mac will not fund any more loans, no matter where they are in the process.

Where does that leave buyers and sellers expecting to close with a loan through Indy Mac?  Screwed.

We'll work to try to patch this deal back together over the next few days.
But damage has already been done.

What a shame.

Comment balloon 6 commentsDon Fabrizio-Garcia • July 11 2008 01:56PM

Comments

I believe Indymac should be held liable for their failure to fund at the last minutes as in the example of your listing.

Posted by Palm Springs Realtor Stewart Penn, Bennion Deville Homes - Broker Associate (Bennion Deville Homes) over 10 years ago

As you may have heard, Indymac Bank has decided to stop most of its lending operations and has exited the retail lending business in order to preserve its capital position. Further details on this can be found in a letter to shareholders, found on theimbreport.com, Indymac Bank's corporate blog.

I wanted to reassure you that I can and will continue to meet the real estate financing needs of your customers without interruption. I am in the process of joining Prospect Mortgage Company, and all loans which do not have closing documents out to be signed are currently being routed, with the customer's permission, through this new company.

The Executive Leadership of our Retail Lending Group has determined that Prospect Mortgage has the best platform for our Sales team. Prospect's commitment to excellence in mortgage banking makes us confident that we will continue to thrive and grow. We are very excited to be joining them, and we're eager for more business!

IMPORTANT INFORMATION YOU NEED TO KNOW (subject to Indymac's normal rate lock, underwriting and funding policies):

  • Loans in process which are approved will close without interruption
  • New loans can be originated, locked, approved and funded without interruption
  • Current loans will continue to be processed without interruption

Don--I think you were misinformed. All loans previously scheduled for this week have been moved to next week to allow QC time to review all loans. My understanding is that all loans that have been approved and rate locked will close close and fund by IMB. Thanks

Posted by Hans Iduma, Certified Mortgage Planning Specialist over 10 years ago

Stewart - I absolutely agree.

Posted by Don Fabrizio-Garcia, Owner/Broker/Trainer - Fab Real Estate (Fab Real Estate) over 10 years ago

Hans - It sounds as though, with the demise of Indy Mac's mortgage division, you are moving to a new company.  Congrats.  I know several in my area who are now forced to do the same.

To say that "loans in process which are approved will close without interruption" is false.  I gave one glaring exception to what you wrote above in this post.  The deal was supposed to close 11am this morning.  We found at at 4:30 pm yesterday that it was not closing due to Indy Mac not funding.  Hmmm...sounds like an interruption to me.  And a very last minute interruption at that.

If they did in fact move all loans from this week to next week, then that's great.  Except for those who were planning on closing and moving this week.  And, again, that to me  - and to all of our buyers and sellers - is an interruption.  Buyers and sellers will no incur additional costs because of Indy Mac's interruption delay.

What you posted above is a press release aimed at putting the company in the best possible light in this difficult situation.  It does not help that closing that was supposed to happen 4 hours ago.

Posted by Don Fabrizio-Garcia, Owner/Broker/Trainer - Fab Real Estate (Fab Real Estate) over 10 years ago

Don...I think Indy Mac should hold up there end of funding loans that are in the process or are closing.. like yours.  This is NOT a good sign at all.

Posted by Valerie Osterhoudt, ABR, Cromwell, CT Real Estate ~ 860.883.8889 (Johnson Real Estate, Inc.) over 10 years ago

Valerie - As of Thursday, the federal government has taken over Indy Mac.  Their banking services will re-open, under government control, tomorrow.  It is unknown what will happen to their loans that were waiting for funding - my guess is they are dead in the water.

Indy Mac is gone.  They apparently had no money to fund these loans.  They should have given their clients more warning so we could have directed them to other funding sources.

Posted by Don Fabrizio-Garcia, Owner/Broker/Trainer - Fab Real Estate (Fab Real Estate) over 10 years ago

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