Sunday, July 6, 2008

IndyMac stops new loans, to cut work force by half - Jul. 7, 2008


NEW YORK (AP) -- IndyMac Bancorp Inc. has stopped accepting new loan submissions in its retail and wholesale forward mortgage lending channels and plans to slash 3,800 jobs, or more than half its work force.


In a letter to shareholders Monday, Chairman and Chief Executive Michael W. Perry says the company has not succeeded in raising additional capital and now does not expect to until the housing and mortgage markets are more stable.


The Pasadena, Calif.-based company says curtailing new loan production is the best way to shrink its balance sheet and maintain sufficient liquidity.


Perry says IndyMac (IMB) will cut its work force to roughly 3,400 employees from 7,200 over the next couple of months to reduce operating expenses by about 60%.


Perry has also asked the board to reduce his base salary by 50%. 


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[Via Home Mortgage Rates and Real Estate News]


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