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FDIC Faces up to $10B Whack on IndyMac Loans
New York Post ^ | 1/12/09 | Teri Buhl

Posted on 01/12/2009 6:38:05 AM PST by marshmallow

THE Federal Deposit In surance Corp. may not have fully washed its hands of IndyMac Bank.

Despite the agreement to sell of the once-troubled bank last week to a group of private-equity investors for $1.6 billion, the FDIC may be facing up to $10 billion in previously-unknown liabilities linked to mortgages IndyMac has sold to Fannie Mae, The Post has learned.

Such a haircut to the FDIC's $34.6 billion insurance fund would leave Sheila Bair's agency less able to deal with the number of bank failures expected this year.

Fannie Mae and the FDIC have been battling over the questionable mortgages for months. Fannie wanted IndyMac, while it was being run by the FDIC, to repurchase the loans because they violated their so-called representation and warranty agreements in that they had early payment defaults or were made under fraudulent conditions.

Fannie even threatened to hold up the sale of the bank until the issue was resolved. Nonetheless, the sale went through last week but the liability for the Fannie mortgages was not transferred to the buyers.

Sources close to the buyers tell The Post that the prospective IndyMac ownership team, led by Steven Mnuchin, of Dune Capital, successfully negotiated release from the multi-billion dollar Fannie claim.

Since IndyMac currently services the Fannie mortgages in questions, and collects fees for that service, that means Mnuchin's group got lots of upside in the sweet deal and very little downside.

Bert Ely, managing director of Ely & Co., said the eleventh-hour move by Fannie to push back mortgage loan liabilities to the FDIC has to increase pressure on the agency's fund "simply because of the magnitude" of the dollars involved.

(Excerpt) Read more at nypost.com ...


TOPICS: Business/Economy; News/Current Events
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1 posted on 01/12/2009 6:38:07 AM PST by marshmallow
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To: marshmallow

Here is a the scam with Indy Mac. Schumer destroys it, Soros and his hedge fund shorts whack all the financial stocks in October to sink McCain and Repubs.

Now Soros, Flowers, Paulson (another Paulson) and Michael Dell “buy” Indy Mac. Taxpayers will probably get all the toxic loans while the new owners get the business plus tax loss carry forwards into infinity.

Flowers and Paulson are big short hedge fund managers and two of the sharoest out there.


2 posted on 01/12/2009 7:10:47 AM PST by Frantzie
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