WASHINGTON Jan 2 The pending sale of failed
mortgage lender IndyMac IDMCQ.PK hit a snag as mortgage giant
Fannie Mae FNM.NFNM.P negotiates with federal regulators
over the value of about $1 billion in obligations it believes
IndyMac owes it, according to a source familiar with the
Fannie Mae believes IndyMac, which has been run by the
Federal Deposit Insurance Corp (FDIC) since it failed in July,
has obligations to repurchase around $1 billion of home
mortgages that failed to meet Fannie's standards, the financial
industry source said.
Fannie contends IndyMac violated legal representations and
warranties -- such as early payment defaults and loans made
under false conditions -- on mortgages it sold to Fannie Mae,
according to the source.
Brian Faith, a spokesman for Fannie Mae, said in a
statement that Fannie is working closely with the FDIC to
resolve the matter.
"We are awaiting information from the FDIC with regard to
servicing valuations and confirmation of the identity and
eligibility of the proposed buyers in order to finalize an
agreement," Faith said in a statement dated Wednesday. "Fannie
Mae will continue to work constructively with the FDIC and
IndyMac Federal Bank to reach a resolution in the near term
that is in the best interest of all parties involved."
A Fannie spokesman was not available for comment on Friday.
An FDIC spokesman declined comment.
Fannie Mae and Freddie Mac FRE.NFRE.P, the largest U.S.
home funding companies, were taken over by the government in
September, virtually wiping out their shareholders.
The FDIC has been seeking a buyer for IndyMac and is close
to a deal to sell the bank's assets to a consortium of private
equity and hedge fund firms, including J.C. Flowers & Co, Dune
Capital Management, and Paulson & Co, according to another
source familiar with the matter.
The consortium would buy the bank and its 33 branches,
IndyMac's reverse-mortgage unit and a $176 billion
loan-servicing portfolio, the source said.
The FDIC has estimated that IndyMac's failure cost about
$8.9 billion. Barclays Capital and Deutsche Bank have been
advising the FDIC on the sale.
The mortgage specialist's IndyMac Bank unit was taken over
by regulators after it failed on July 11, making it one of the
largest bank failures in U.S. history. At the time, it had $32
billion in assets and $19 billion in deposits.
IndyMac was the ninth-largest U.S. mortgage lender in 2007,
according to the newsletter Inside Mortgage Finance.
(Additional reporting by Paritosh Bansal in New York and
Rachelle Younglai; editing by Jeffrey Benkoe)