Monday, June 30, 2008

CRL Report on Indymac

by Bill McBride on 6/30/2008 08:00:00 PM

Here is a new report from the Center for Responsible Lending IndyMac: What Went Wrong? Here is the PDF file

Ben Butler, an 80-year-old retiree in Savannah, Georgia got an IndyMac loan in 2005 to build a modular house. IndyMac okayed the mortgage based on an application that said Mr. Butler made $3,825 a month in Social Security income.

One problem: The maximum Social Security benefit at the time was barely half that.

Mr. Butler had no idea his income had been inflated by IndyMac or the mortgage broker who arranged the deal, his attorney maintains. Even if IndyMac wasn’t the one that puffed up the dollar figure, the attorney says, it should have easily caught such an obvious lie.
That is just one example. The CRL claims to have "substantial evidence that IndyMac routinely made loans with little regard for their customers' ability to repay the loans."

Move aside Countrywide, it looks like Indymac will take a turn at the whipping post. is the new whipping boy.