IndyMac Bancorp Inc, holder for Indymac Bank (the nation´s 7^th largest mortgage originator), just announced that it is no longer thought to be "well capitalized" by its regulators and will be laying off 3,800 employees, as well as putting a halt on new loan submissions and rate locks. The Chairman and CEO of IndyMac, Michael W. Perry, has stated that they will honor all prior rate-locked loans and will fund loans made in the next additional weeks.

IndyMac has been well known for its usefulness in helping borrowers to obtain single-family homes, and other more personal geared items. However, as home values fall and foreclosures and loan defaults rise, the company´s assets have reduced and they have been unable to raise more capital. Normally this can be done by selling assets and making the balance smaller, however, IndyMac is not getting many bids or realistic offers. Therefore, they say their only remaining option is to to halt new loan generation.

During the 1^st quarter, $9.6 billion in new mortgage loans were generated, which is almost 62% lower then the company´s figure from last year. Their amount of nonperforming investment loans went up to $1.8 billion, or about 6.51% of their total assets. They were able to cut losses substantially, going from $509 million in the last part of 2007, to $184 million in the 1^st quarter of 2008, due to their focusing more on producing loans backed by Fannie Mae and Freddie Mac, but Perry announced that their 2^nd quarter will probably show higher losses then the 1^st quarter.

IndyMac now plans to focus their attention on loan servicing and Financial Freedom, their reverse mortgage unit. The two are estimated to generate $5-10 billion a year in new loans backed by Fannie Mae, Freddie Mac, or FHA (the Federal Housing Admin.).

As soon as the housing and mortgage upheaval lessens, the company hopes to take more of an investor role in mortgage loans and/or backed securities. They may also take steps to one again get started on mortgage lending at a low cost or non commission based role.