In yet another sign that the U. S. housing market melt down is not getting any better, IndyMac Bancorp announced today that it would abandon most home lending and would lay off more than half its 7,200 employees - thus, there will be 3,600 more families at possible financial ruin. I remain convinced that unless and until the residential housing market recovers, any talk of a recovery of the economy is just talking heads blowing smoke up the public's ass. Other than the oil industry, the only business segment I know of that is booming is law firms that do foreclosure work. They are so busy that they can barely keep up with the volume of new matters. Here are some story high points from the Los Angeles Times:
IndyMac Bancorp said Monday that it would abandon most home lending and would lay off more than half its 7,200 employees in a shuddering acknowledgment that its attempt to reshape itself as an old-fashioned lender had failed. The Pasadena-based savings and loan said it was acquiescing to federal regulators who had booted it from the list of well capitalized banks and required a change in business strategy. The bank lost $184 million in the first quarter of this year and said its second-quarter loss would be still bigger. It lost nearly $615 million last year, the first annual deficit in its 23-year history.
IndyMac shares, which traded above $30 last July, closed at 71 cents Monday, up 4 cents. IndyMac waited until the close of regular trading to make its announcement; the stock was moving lower in after-hours trading. IndyMac will have just 3,400 workers when it is through shutting nine regional loan offices, including four in California, that made loans through independent brokers, and about 150 direct-to-customer retail offices in the West and Northeast. It wouldn't break out where the job cuts would be.
IndyMac was started by Countrywide Financial Corp. founders Angelo Mozilo and David Loeb in 1985. It announced its cuts less than a week after Countrywide, the largest independent home lender, was taken over by Bank of America Corp., which in January stepped in as reports swirled that Countrywide might have to file for bankruptcy protection.