Breaking: Federal regulators take control of IndyMac

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Breaking news from L.A. Times: ‘Federal regulators say they have taken control of Pasadena-based IndyMac and will transfer control to the FDIC.’

More: ‘The federal government said it took control of troubled IndyMac Bank today, in what regulators called the second-largest bank failure in U.S. history. The Office of Thrift Supervision in Washington, the chief regulator of Pasadena-based IndyMac, said it transferred control of the $32-billion bank to the Federal Deposit Insurance Corp.’

Battered by bad loans, and a declining balance sheet, IndyMac is viewed as all but worthless by investors, who drove its stock down to just $.28/share today prior to word of the federal takeover. The shares had peaked at $50.11 in 2006.

The federal takeover of the bank comes just four days after IndyMac announced that, at the request of federal regulators, it was exiting the mortgage business and laying off more than half of its staff.

As recently as last week, the struggling thrift had denied that it was close to failure, saying it was working with regulators to improve its ‘safety and soundness.’

But the Mortgage Lender Implode-O-Meter website reported earlier today, ‘The FDIC is in charge.’ of IndyMac. Full post: ‘The FDIC is in charge’ was the verbal announcement ringing through the halls of IndyMac’s Pasadena offices. ‘Everyone show up for work on Monday.’

Will file more on this later. More on IndyMac here.

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Photo Credit: Bloomberg News