Full Description

IndyMac Bancorp, Inc. (IndyMac Bancorp) is the holding company for IndyMac Bank, F.S.B. (Indymac Bank). Indymac Bank provides financing for the acquisition of single-family homes and also provides financing secured by single-family homes and other banking products to facilitate consumers’ personal financial goals. It also originates mortgage loans through the e-MITS (Electronic Mortgage Information and Transaction System) platform that automates underwriting, risk-based pricing and rate locking through the Internet at the point of sale. The two operating segments of the Company are mortgage banking and thrift. Mortgage banking involves the originating and trading of mortgage loans and related assets, as well as the servicing of these loans. The thrift side of the business invests in single-family residential mortgage assets, whole loan and mortgage-backed securities (MBS). In April 2007, the Company acquired the retail platform of New York Mortgage Company (NYMC). In July 2008, the Company filed for Chapter 7 protection.

Mortgage Banking Segment

The mortgage banking segment’s activities include loan production, loan sales, and the performance of the servicing functions. Loan production is achieved by delivering a suite of prime mortgage products to the customers using a technology-based approach across multiple channels supported by 11 regional mortgage centers. The product offerings includes adjustable-rate mortgages (ARMs), intermediate term fixed-rate loans, pay option ARMs offering borrowers multiple payment options, fixed-rate mortgages, and reverse mortgages. It also offer mortgages and reverse mortgages to consumers through channels, such as direct mail, Internet leads, online advertising, affinity relationships, real estate professionals, including realtors and through the Southern California retail bank branches.

The Company sell mortgage loans on a on a non-recourse basis. It also sells loans through private-label securitizations. Loans sold through private-label securitizations consist of non-conforming loans and subprime loans. The securitization process involves the sale of the loans to one of the wholly owned bankruptcy remote special purpose entities, which then sells the loans to a separate, transaction-specific securitization trust in exchange for cash and certain trust interests.

The mortgage production division is comprised of consumer direct division; mortgage professionals group (MPG) and financial freedom division. The consumer direct division markets mortgage products directly to existing and new consumers through direct mail, Internet lead aggregators, outbound telesales, online advertising, and referral programs, as well as through the Southern California retail bank branches.

The MPG is responsible for the production of mortgage loans through relationships with mortgage brokers, mortgage bankers, financial institutions, capital market participants across the country, realtors, and homebuilders, and is composed of two channels: retail, and mortgage broker and banker. The division targets customers based on their loan production volume, product mix and projected revenue. The retail lending group, a channel of the MPG, provides mortgage financing primarily to home purchase oriented consumers by targeting realtors, homebuilders and financial professionals via storefront mortgage loan offices. During the year ended December 31, 2007, the Company had 182 retail mortgage offices.

Financial Freedom division is the provider of reverse mortgages in the United States. It is responsible for the origination, purchase and servicing of reverse mortgage products with senior customers via a retail loan officer sales force and a mortgage banker and broker relationship sales force.

The Mortgage Servicing Division manages the assets the Company retains in conjunction with the mortgage loan sales. The assets include MSRs, interest-only securities, prepayment penalty securities and late fee securities; derivatives and securities held as hedges of such assets, including forward rate agreements swaps, options, futures, principal-only securities, agency debentures and United States Treasury bonds, and loans acquired through clean-up calls or originated through the customer retention programs.

Servicing of mortgage loans includes collecting loan payments, responding to customers’ inquiries, accounting for principal and interest, holding custodial (impound) funds for payment of property taxes and insurance, counseling delinquent mortgagors, modifying and refinancing loans, supervising foreclosures and liquidation of foreclosed property, performing required tax reporting; and performing other loan administration functions necessary to protect investors’ interests and comply with applicable laws and regulations. Servicing operations also include remitting loan payments, less servicing fees, to trustees and, in some cases, advancing delinquent borrower payments to investors, subject to a right of reimbursement.

Thrift Segment

The thrift segment invests in single-family residential (SFR) mortgage loans (predominantly prime ARMs, including intermediate term fixed-rate loans), mortgage-backed securities and construction financing for single-family residences or lots provided directly to individual consumers. The segment is also engaged in the consumer construction lending.

Single-family residential mortgage loans held for investment (HFI) are originated or acquired through the mortgage banking production divisions and transferred to the thrift. Held for investment loans may also be acquired from third party sellers and such loans are typically prime loans. The thrift attempts to invest in loans on which it can earn an acceptable return on equity.

The consumer construction division provides construction financing for individual consumers who want to build a new primary residence or second home. The division offers a single-close construction-to-permanent loan that provides borrowers with the funds to build a primary residence or vacation home.