Indymac is on the move again, announcing that it will take over 90 American Home Mortgage branches and hire about 850 of its former employees to build up its retail side.
The announcement signals a move to exit the wholesale space, their bread and butter up until a few months ago.
Indymac will now focus on originating conforming loans and working with prime borrowers, those with superb credit, verified income and assets, and larger down payments.
The company will also push away from working with mortgage brokers, opting to offer loans through its new horde of retail branches.
This should reduce some of their exposure to bad loans, as they’ll ultimately originate and process most loans under their own roof, without the meddling of a third-party.
But some analysts felt the business shift would be a tall order for Indymac, given the fact that it’s a complete overhaul from their previous business model.
Indymac acquired the retail assets of New York Mortgage Co. back in April, and plan to buy retail offices from Barrington Capital in the near future as part of their ongoing retail expansion.
The acquisitions should leave the mortgage lender with at least 134 retail lending offices and 1,466 full-time employees, up from nine retail offices with 126 employees.
All that said, the company still warned that volume would be down significantly as a result of the changes, likely nowhere close to the nearly $90 billion in mortgages funded last year.
Indymac shares were trading up about 2%, to $23.30 in midday trading Wednesday.