St. Louis Mortgage News - Goodbye Tiny Dancer

Goodbye Countrywide and Goodbye to their step brother Indy Mac by Chris Scheer, Cornerstone Mortgage, O’Fallon, MO

The Federal Reserve stepped in and took over Indy Mac bank on Friday. 

This comes as no shock to members of the mortgage industry as recently Indy Mac announced it was ceasing its retail mortgage operations.

So why do I call Indy Mac Countrywide’s step brother? 

For years Indy Mac mirrored all the lending programs that Countrywide created, almost to the point where unless you looked at the login page when you were visiting their site, you could not tell the 2 companies apart.  There were times when Countrywide would announce a change in a program or guideline and within hours the same change would be announced at Indy Mac.  From an originators standpoint, it was comical how the two companies mirrored each other.

When Countrywide was hammered last year and the Fed stepped in to rescue them Indy Mac started to take on a life of their own.  They for the first time were the first of the two companies to change programs and products reducing their exposure and tightening their lending practices.  It was because of these efforts that they managed to last as long as they did.  If it were not for comments made by Senator Schumer  they may have managed to right their ship and avoid the Fed taking them over.

So why does the Fed rescue one company and take over another?  Stock penetration and price.  If Indy Mac would have had the numbers of shareholders that Countrywide had world wide or even Bear Stearns, they would have been rescued as opposed to taken over. 

For Questions or comments, please contact Chris Scheer at chrisscheer@stlouisrealestatevoice.com

Tags: St.+Louis+Real+Estate, St.+Louis+Mortgage+News, Indy+Mac, Countrywide

This entry was posted on Monday, July 14th, 2008 at 5:16 pm and is filed under Mortgage News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.