Tracking bidders for IndyMac

This article was originally on a blog post platform and may be missing photos, graphics or links. See About archive blog posts.

Prospective nonbank buyers apparently already have been kicking the tires at Pasadena’s IndyMac Federal Bank, the low- and no-doc mortgage specialist that spun out of control and crashed last summer.

The Federal Deposit Insurance Corp. said Wednesday that it would begin to allow bidders without a bank charter to take part in the auctions of failed banks. So I asked IndyMac spokesman Evan Wagner if the new rules applied to IndyMac. His e-mailed response:

That sounded to me like the FDIC was expanding IndyMac’s auction to invite new bidders in. But Wagner since has clarified that bidders without bank charters had already been allowed into the auction process. No additional bids are being taken, he said.

So who might the nonbank bidders for IndyMac be? No one is revealing their identities or for that matter those of bidders that already hold bank charters, just saying that there are competing bids and it may be possible to announce in December which parts of IndyMac go to whom -- and how much of the leftover portfolio of toxic loans may wind up stuck on the FDIC’s books.

Unsurprisingly, bidders for failed institutions have focused mainly on deposits, and certainly not the loans that caused the damage. IndyMac’s deposits are looking sorely depleted, in part as a result of a run on the bank before regulators seized the thrift July 11, in part because the outflow continued afterward despite the agency’s pleas that IndyMac was now the country’s safest bank because it was government-owned.

At the end of the second quarter IndyMac’s deposits were $18.33 billion, while at the end of the third quarter they had shrunk by two-thirds to $6.27 billion.

Stay tuned.

-- E. Scott Reckard