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The mortgage industry is showing signs of life


The nations second largest wholesale lender released some interesting news this week.

The stock market has been very brutal for shares of Indymac bancorp which has seen its share values drop from $30+ per share to know under $5 per share. The mortgage industry should be breathing a little easier though following up on some interesting news released from the company this week. It seems just one month earlier the secondary mortgage market was in complete turmoil and their was no market for AAA rated mortgage backed securities. This crisis nearly put Thornburg mortgage out of business and was a key factor in the demise of Bear Stearns. Indymac this week announced they were able to successfully sell almost $350 million worth of mortgage securities comprised of Alt A loans and Jumbo mortgage loans. The net adjustment on this sale was a loss of two million dollars. Thirty days ago this could have resulted in a loss in the tens of millions of dollars. The significance is that as this ratio improves it will bring more dollars into the marketplace and allow lenders to begin opening their lending to more consumers which would be beneficial to the market. The company sold the securities in an on going effort to right size their balance sheet and improve shareholder value and risk. Indymac is projecting a return to profitability in the second or third quarter of this year and a healthy secondary market will be critical for them to accomplish this goal.

4-10-2008 ? LoanNetwork.com





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