Why IndyMac is ‘unattractive’: FDIC’s Bair counts the ways

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The Federal Deposit Insurance Corp. has its work cut out to get failed IndyMac Bank in shape for a potential buyer or buyers, FDIC Chairwoman Sheila Bair suggests in a Bloomberg TV interview to be broadcast this weekend.

‘There are a number of things about this institution that, to be honest with you, make it unattractive to a potential purchaser,’ Bair says in the interview, according to a preview story from Bloomberg.

She cites the Pasadena bank’s mortgage losses, its reliance on brokered deposits and its relatively small ‘core deposit base,’ Bloomberg says.

‘What we’re trying to do now is do what we can to strengthen it, strengthen the asset quality, strengthen the servicing portfolio, so we can sell it off and get a better value, hopefully,’ Bair said.

Not much news in that, but it made me wonder if Bair was signaling that the FDIC won’t be able to sell IndyMac within 90 days, as per the plan it announced when it took control of the bank July 11. A spokesman for the FDIC, however, said the agency still was expecting to make the sale in that time window.

Meanwhile, HousingWire.com has a good story on the complications the FDIC faces in finding a buyer or buyers for IndyMac’s huge loan-servicing business, which handles $200 billion in mortgages, most of which have been securitized.

‘There aren’t but four or five firms that could take on this big of a portfolio in one piece, and so far, it’s anyone’s guess if there’s interest there enough to make it the least costly scenario the FDIC will look for,’ one banker tells HousingWire.com.

Read the full story here.