Go to Admin » Appearance » Widgets » and move Gabfire Widget: Social into that MastheadOverlay zone
March 22nd, 2009 by Temple City Tribune
It was a picture perfect California morning, warm temperatures and clear blue skies Saturday morning. However, it was quite another, less pleasing canvas for the approximately 35 people who held placards and hand written signs protesting IndyMac and the FDIC alleging fraud. An estimated 10,000 depositors lost $270 million in deposits when IndyMac collapsed.
Honks of support from passing motorists helped fuel the group’s resolve. From single parents with their children to sheriff’s deputies, the small but well organized depositors marched in front of IndyMac headquarters in Pasadena. The group IndyMacDepositors.com, led by Lisa Marshall, has lost millions of dollars collectively due to the collapse of the bank and the subsequent FDIC takeover last July.
The protestors were demanding that the FDIC “stop discriminating” and “make IndyMac depositors whole.”
After selling her Orange County home, Cheryl Hodgson who works for the Orange County Sheriff’s dept deposited an escrow check for about $360,000 with IndyMac Bancorp. Less than a month later, the Pasadena-based thrift was seized by the federal government – and Hodgson lost $130,000.
On Saturday she said she was stunned that no one in her Orange County branch informed her of the potential danger with deposits over $100,000.
She noted that IndyMac was offering “a really good rate.” “You’d think someone at the bank could have explained to me that I was putting in money well above the insurance limit,” said Hodgson. It’s a complaint echoed by many other depositors with whom we spoke Saturday morning, that the bank did an abysmal job of informing customers of their legal rights when they made those large deposits.
Another depositor, Clotilde Baltazar, a single mother, stood on the corner of Lake and Walnut with her two children Jason and Katarina, 10 and 12 respectively. They held banners, one of which asked for President Obama to show them compassion, the other child’s sign saying her college funds were completely gone. Their mother told the Pasadena Independent that she lost a $92,000 that was earmarked for her children’s’ education and fears the children will have little to no chance now of a higher education.
“We’ve not lost everything, we do have a roof over our heads” she said “But after the divorce, this was the only money I had for the children, per our settlement agreement.”
Baltazar’s story is not uncommon. It seems depositors’ average loss at IndyMac loss is well over $100,000.
Those losses might have been prevented, or at the very least minimized, had federal regulators done their jobs in overseeing IndyMac a government report this week determined.
The 83-page report from the Treasury Department’s inspector general slammed the Office of Thrift Supervision (OTS) for failing to address key areas of the thrift like nontraditional loans and “unsound underwriting policies.” The report casts a very dark shadow over both the OTS and its director, John M. Reich, who resigned Friday.
IndyMac prospered during the real estate boom, which fueled demand for its so-called alt-A mortgages, loans that it granted to borrowers with clean credit but with little or no documentation of their income. It would then sell those loans to other banks or investors through bundled securities.
As the real estate market collapsed, however, IndyMac was stuck with loan derivatives it couldn’t sell in order raise more money to offer more loans, etc.
By the end of March 2008, more than half of the bank’s money was coming from loans it was getting from the federal government and short-term, high-interest deposits from “brokered deposits.”
These brokered deposits became critical for IndyMac to stay afloat.
On May 6, the FDIC told OTS regional managers that IndyMac was close to failing and needed money fast.
The group, IndyMacDepositors.com, is researching and documenting the mismanagement and lapses in federal agency monitoring involving IndyMac bank administration prior to, and post-FDIC receivership. There is a phone call and letter-writing campaign to local, state, and federal representatives advocating that the depositor’s rights guaranteed in federal regulations are correctly and adequately carried out.
During the two hour protest, the Pasadena Police dept. was called to the corner of Lake and Walnut, but left shortly after an officer advised Cheryl Hodgson and the other protestors to keep the sidewalks clear for pedestrians.
Perhaps one of the more compelling stories we heard Saturday was that of Elaine Lopez. She not only lost her son in Iraq but subsequently all the monies she received from the government for her fallen son that was in the hands of IndyMac and its financial experts.
About 25 people attended a protest outside IndyMac bank Saturday morning demanding answers from the feds as to how they can reclaim their lost monies. The bank’s depositors have lost an estimated 500 million dollars.