Update: IndyMac to slash 53% of jobs, halt retail, wholesale lending

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Breaking news on IndyMac today: The troubled mortgage lender is halting retail and wholesale lending and will lay off more than half of its staff, according to Calculated Risk. Acting at the request of federal regulators, IndyMac said today it will slash 3,800 jobs in the next couple of months.

The mortgage blog Blown Mortgage headlines its story, ‘IndyMac is done.’ The California company is one of the largest independent mortgage companies left in America, but it is clinging to life -- its shares closed at 71 cents today, down 98% from their peak of nearly $49/share in May 2006.

In a dire letter to shareholders, CEO Michael Perry acknowledged that federal regulators have told the bank it is no longer ‘well capitalized’ and have requested a new business plan to keep the bank in business.

Federal regulators ... ‘have advised us that we are no longer ‘well capitalized’, which we stated on May 12 was a possible scenario,’ Perry said in the letter today. ‘Our regulators have also asked us to submit to them a new business plan for their review and approval, something on which we have been working with them for some time. We have agreed on the basic elements of the plan, and the regulators have directed us to begin executing on it.’

More: ‘As a result of the above, we have made the difficult decision, effective July 7, 2008, that we will no longer accept any new loan submissions or rate locks in our retail and wholesale forward mortgage lending channels, except for our servicing retention channel. ... Unfortunately, the above actions will necessitate the reduction in our present workforce from approximately 7,200 to roughly 3,400 or so over the next couple of months, which should reduce our operating expenses by roughly 60%.’

Please note: Headline corrected.
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