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IndyMac Is Set to Be Sold to Private Investors
December 27, 2008, By DEALBOOK

IndyMac Bancorp, one of the largest banks to fail as a result of the subprime mortgage crisis, is close to being sold to a consortium of private equity and hedge fund firms, people briefed on the matter told DealBook.

The Federal Deposit Insurance Corporation, along with a team of former Lehman Brothers bankers who are now with Deutsche Bank and Barclays Capital, have been engaged in the sale process since federal regulators declared IndyMac insolvent in July and seized the company. The deal could be announced as soon as Monday, these people said.

At the time, the collapse of IndyMac ranked as the second-largest failure in FDIC history and was quickly followed by near-failures and subsequent fire sales of banking giants Wachovia and Washington Mutual.

The buyers include private equity firms J.C. Flowers & Company and Dune Capital Management and the hedge fund firm Paulson & Company, these people said.

The proposed deal is unusual because it is one of the first transactions involving unregulated private equity firms acquiring a bank holding company. Federal regulators have been locked in a heated battle throughout the credit crisis as banks continued to fail and private equity firms initially came to the rescue, but then backed off because of regulatory concerns.

In September,(2008) the Federal Reserve eased regulations to allow private equity firms and hedge funds to acquire portions of bank holding companies without being subject to undue regulation. Previously, a private equity firm that held more than 24.9 percent of a bank was required to register as a bank holding company and it restricts the investor’s ability to make investments outside of the banking industry.

The consortium would buy the entire bank, including its 33 branches, reverse-mortgage unit and $176 billion loan-servicing portfolio.
The deal is a coup for Dune Capital, founded in 2004 by the ex-Goldman Sachs partners Steven Mnuchin and Daniel Niedich, and the other partners because they are picking up a solid bank on the cheap.

J.C. Flowers, led by the former Goldman partner, J. Christopher Flowers, focuses on financial firms, having tried to acquire student lender Sallie Mae last year. But the firm has struck few deals so far amid the banking crisis.

Paulson & Company, led by John Paulson, has been one of the biggest winners in the subprime mortgage meltdown, having reaped billions of dollars by betting against risky home loans. Mr. Paulson recently indicated to investors in his hedge funds that he is prepared to start buying up low-priced debt like prime mortgages and investing in financial institutions.

When Indymac failed, more than 130 F.D.I.C. employees swooped in on the bank to prepare it to reopen under government supervision. The bank was founded in 1985 by Angelo Mozilo and David Loeb, who also founded Countrywide Financial. IndyMac once specialized in “Alt-A” home loans, which often didn’t require borrowers to fully document income or assets.

It collapsed after defaults mounted and as tight capital markets caused losses on mortgages it couldn’t sell.

The seizure came after panicked customers withdrew more than $1.3 billion of deposits over 11 business days. The withdrawals followed comments in late June by Charles E. Schumer, the Democratic senator from New York, questioning IndyMac’s survival.
–Zachery Kouwe


21 Responses

  1. @linda

    The LA county Norwalk office is extremely picky about what they will record…the things listed on their website are the ONLY things they will record…nothing else…and boy, do the fraudster’s know it—they’ve got it ALL figured out how to get away with recording TOTAL CRAP….and stealing homes…

  2. Yes. I will vouch for California Recorder’s office. They would not let me record anything and also gave me the paper stating to the effect that if I tried to record the documents again, I could be subject to misdemeanor. The lady even called over a guard, I guess just in case I raised a stink. Their behavior in the Norwalk office is simply OVER THE TOP. I could not record the Notice of Right to Preserve an Interest even though it’s in the notary handbook. In fact, I could not record anything at all !!!
    That to me, seems like a misdemeanor on THEIR part.

    RE: the article above, this is all so predictable. Makes me sick how they play around with “real estate” w/o respect to peoples’ lives.

  3. I recommend a security system on your house with a sign outside that says y ou have a security system. They came to my house, too, but I had a security system. You can get wireless systems if you want. Also, the state I live in has a law that says I can shoot to kill if someone breaks into my house. Check out your state law. Most do say you can defend yourself IN YOUR HOUSE. Also, check out the indorsement on your note. If they have sold the debt, merged with another entity, or sold the mortgage company to another entity, the indorsement has to say that. Indorsed in blank will not do. In other words, the indorsement has to say: Bank A to Bank B and then indorsed in blank. Also, the entity must be holding your original note, not a BS copy.

  4. Thanks, Abby. Yes, CA is definitely NOT homeowner friendly…

  5. @Chris
    since you have New Century involved, and I assume it is from the loan origination, did you know that there are about 15 pro se homeowners fighting up in New Century bankruptcy in Delaware? Several have negotiated cash settlements of between 60K and 80K.

    Most have faulty assignments and TILA etc. Additionally, New Century might have been named ‘lender’ on you loan documents, but they rarely used their own monies for funding of loans. Some folks learned that different entities were the true lender.

    Do you know who signed your assignment and who notarized it?

    New Century had their own set of employee-notaries and they were instructed to not conform to California notary laws. They were all California notaries.

    Here is a list of many of the securities trusts which New Century loans went into
    you can email me at

  6. johnault
    re: advise to Carie on filing Notice of Intent, Notice to Preserve.

    California has very strict recordation laws and a list of what can be recorded and what cannot. Carie can try, but the recorder most likely will not record such a document and they will give you a letter saying if you try to record it again, you will be charged with a misdemeanor.

    However, and I am not sure Carie did this, but if one is pro se you can attempt to get the judge to sign a lis pendans and record that or if you have an attorney they can do it.

    That being said, I know a person who had a federal judge sign the lis pendans and it was recorded but nevertheless the UD judge in California ignored it and so did the buyers of the foreclosed property.
    It had little effect to stop her eviction. Six months later she is still not back in her home. She did sue the realtor and broker who listed her home after the foreclosure buyer listed it for sale. But she has a huge battle right now.



  8. For all who have known my situation:

    Received a letter from Ocwen/New Century servicer…saying they did a property inspection and the house is abandoned and unsecure. BS!

    They are threatening to trespass, change the locks and winterize the property. (NC has been over 50 degrees every day). Anyway, this crap keeps up and someone is going to get injured. I mean how do you know who these people are, even with ID, if they have one? I don’t know about the rest here, but I am taking these threats to my personal privacy, loss of domicile and such, very, very seriously. We have a pending case in Federal Court, which they are ignoring…Suggestions folks?

  9. hey, carie, et al It’s said “revenge is best served cold.” Some of us certainly hope that’s true.

  10. I’m sorry, carie – just noticed your email address.

  11. @carie – I can feel your frustration, anger, and pain right over the wire and i’m sorry you have to go thru this after fighting so hard. You duked it out and then bam! foreclosed on you, right? I had mentioned that deal with recording a notice of preservation of issues, and in fact just 2 days ago I came accross something like it online. In typical idiot fashion I said oh I’ll remember and get back to it. Well I don’t remember. If I remember you filed a deed or something on your house? Don’t know about that sort of thing. But if it were me, I would file a Notice of Intent, Notice of Preservation, Notice of Preservation and Intent? Something which gives notice of my claims, not a dissertation of what happened, just my claims. So and so demonstrated no authority to do such and such.The record fails to produce a proper chain of title. The NOD is legally deficient because.
    The substitution of trustee was executed by a party without apparent authority. I’d list whatever I thought is true. I would do a cover sheet with the Parcel No. at top left and a 1 1/2″ min margin all around and call it Notice of X whatever word. then I would write the legal description and then commonly knowns as : street address and I would sign that page. Then on the next page I would say Notice of X (whatever) and list the suckers and then I would say this list is not exhaustive. Then I would say that I intend in and by this notice to preserve my interests and rights accordingly. Then I would get my autograph notarized and record it. If I hadn’t taken it to the recorder’s office and had mailed it in, I would put after recording mail to: an address, I think that’s what I’d do.
    I’m not a lawyer and this is not legal advice. It’s just what comes to mind if I wanted to do something.

  12. @iwantmynpv

    This is the Indymac Ventures LLC you are talking about:

    Have you seen that before?

  13. @iwantmynpv

    My BS situation (in CA) is 2006 refi with IndyMac/OneWest…MERS…Deutsche “Trustee” of MBS…to Aztec Foreclosure Mill—who STOLE my house with the TOTAL LIE that some “investor/lender/owner” of the MBS has the right to foreclose and sell…

    We are moving out…for now…but I want to sue for quiet title, or something—ANYTHING—I’ve got nothing else to lose at this point…I want justice…and I want to prevent the new “owner” (some investor/real estate agent) from getting MY property…

    Any ideas?

  14. I , for one, am getting my wife out of the house and I will remain, to make a last stand – so to speak . Someone has to man the fuck up here , talk is cheap and fighting the sleazy bastards is wearing me out . I may take it to them and see how they like to live in a perpetual state of fear – so type away ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,

  15. Any specific reason something dated Dec. 27, 2008, was posted today? If I recall, this is old, very old news…

  16. Did OneWest Bank bought the assets from IndyMac? And they make more money foreclosing or short selling the house just because of the deals with FDIC at the time of the purchase?

    BTW, John Paulson who produced a CDS and bet against the subprime loans was down last year. He lost tons of money for their clients.

    I believe that he should be categorized an insider to the CDS that he created and short that. CONflicts exist at the WS to EXTRACT money from the borrowers and the investors and now from the tax payers.


    vs. First American Title.

  18. Louise, are you talking about rehypothecation?

  19. @ whomever posted this article. It is an irresponsible article written to shadow the true facts. That entire PPIP transaction was and is a lie. The Loans never left the conservator bank or the receiver bank and all sit inside a shell LLC named Indymac Ventures.

    The group in question was not Lehman guys, none of them. In fact they never purchased a single loan. it is a huge sham and each of the FDIC deals done after; accept the WAMU, deal is very similar.

    Stop repeating the inaccuracies and giving credence to a story that is entirely false. That is what puts us where we are!

    The illussion!. Next they will make a movie telling us how they didn’t see it coming, while they were shorting the pools of loans they had just sold the cash flow too, well er.. unwary investors. oh wait, they already made that movie.

    “Steal a billion you go to jail, steal hundreds of billions your employees go to jail, steal trillions – Oliver Stone makes a movie so the public thinks you were all caught off-guard.

    Lies Lies Lies

  20. If you are a homeowner, do not let the thieves take your house. They all have to have the perfected documents to take your house. Most of them do not have the perfected documents and most of the loans were never securitized, so the banks sold them multiple times. When you sell the same box of chocolates several times, you are committing fraud. In other words, it does not matter who buys the debt, they still have to have the legal documents that prove ownership.

  21. evidently they want to take over the forclosure business since the fed regulators and the white shoe banksters let them get “ownership of the notes” maybe the gov will give them a few extra bucks to cover eviction costs too

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