IndyMac Tightens Mortgage Guidelines

December 13, 2007 No Comments »

IndyMac Bancorp has just announced a series of significant underwriting guideline changes in its mortgage lending division.

The Pasadena-based mortgage lender has eliminated all “No Ratio” and “NINA” products across the board, and limited “Stated income” on jumbo loans to 75% max loan-to-value.

The company is also getting rid of its hybrid option-arm loan program, and scrapping the lot loan program altogether.

Expanded approvals on Agency Conforming will now to be limited to 75% max loan-to-value.

All loans tied to any of the discontinued products must close within their original lock period, as no extensions will be offered.

Last week, IndyMac Chief Executive Michael Perry said he didn’t expect the company to be profitable until at least the second half of 2008.

And earlier this week, the S&P downgraded IndyMac’s credit rating to “junk” status, setting off a three-day stock sell-off.

Shares of IndyMac, which began the week above $8, were down 10 cents, or 1.51%, to $6.54 in afternoon trading Thursday, sporting a market cap just above $500 million.

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