IndyMac has finally been kicked to the curb by regulators.
Officially they are still in the mortgage business, willing to fund reverse mortgages and strive for 'servicing retention' - which means collect the monthly payments on existing loans, refinance those who can and process the foreclosures of those who can't.
They have a corporate blog which lays out an optimistic future:
In addition, when this housing and mortgage crisis abates and we return to health, we would also hope to be an investor in mortgage loans and mortgage-backed securities and might re-enter the national forward mortgage production business with a low-cost, non-commissioned-based business model. (bold added)
Who knows if they'll survive, but we can get a glimpse of what regulators expect as the future of the mortgage business.
1. Fund agency paper (Fannie, Freddie, and FHA/VA).
2. Retail-only.
We've known for a while wholesale lending was closing out, and that mortgage brokers are on the endangered-species list. There aren't enough wholesale lenders willing to fund loans that borrowers find attractive.
We have seen and heard thoughts like 'mortgage crunch' and 'credit crisis', but we haven't seen anything yet. Every time another lender goes out, the secondary market for jumbo loans get smaller.
There have been 1,160 houses close escrow this year above $800,000 in SD County, or on average less than 200 closings. Yet currently there are 2,273 houses listed for sale over $800,000.
As the selling season winds down, we'll probably see 150 or so closings per month in the upper range, and many of those will be buyers with healthy down payments to get under the conforming-loan limits. Those buyers will be exceeding particular about price with so many choices available - there will be literally 10 times as many listings as sales.
The impact of lenders going out of business shouldn't affect the lower-end much, as long as there are conforming loans and govies (FHA/VA).
But the higher-end is feeling it - there have only been 253 houses go pending since June 1st. Last year there were 464 closings that went pending in the same time period. By the time a few of this year's pendings fall out, the YOY sales of homes over $800,000 this summer will be down more than 50%!
It's not that obvious to casual observers, so I'll state it clearly - if you're selling a higher-end home, the lack of attractive financing options are killing your chances of selling. Lower your price - NOW!