It looks like Indymac has terminated its commercial lending operations.
Below is a portion of an email I just received from a friend that works for ICLC.
Quote:
Deal Colleagues
ICLC, due to the current market and capital constraints has ceased lending operations as of 7/1/08.
A formal announcement from ICLC will be coming out tomorrow regarding details and loans in process.
This comes as no real surprise other than the fact they just signed a deal with Fannie Mae to originate multifamily loans and Zions Bank to originate commercial and SBA loans. At least they tried all the way up until the end.
Aristotle Nitroglycerin
Joined: 05 Dec 2007
Posts: 575
Location: On a sand dune, sipping a cold soda
Funny thing, back in 1986, when the S&L crisis actually began, a commercial real estate lending operation out of Encino, owned by a Utah S&L, abruptly shut down and left a bunch of construction loans in process with no funding.
Some of the borrowers went running down to L.A. Superior Court to try to get mandatory injunctions compelling the company and its S&L parent to finish disbursing the loans.
One borrower needed money to pay the company which provided the temporary supports for the walls of a partially built concrete tilt up building. He told the judge the company was going to pull the temporary supports, and the concrete walls would fall down. Against all of the reported case law the S&L argued, that a mandatory injunction for disbursement of money could not be ordered on an emergency basis, the judge ordered the disbursement of the money whether the commercial mortgage company was still in business or not.
The S&L also had 2 residential loan servicing companies, and soon after the commercial lending operation shut down, the owners of the residential loans canceled their serving agreements, and demanded their loan files back.
The S&L resisted, filed lawsuits against the loan portfolio owners, and not only refused to give the files back, but started slowing down disbursements to the portfolio owners which were due on a set date each month. As the litigation dragged on, the wire transfers from the S&L to the portfolio owners got smaller and smaller, and later and later, and the portfolio owners' audits revealed that the S&L was skimming several million dollars a month extra to help pay its overhead.
One portfolio owner, a federally chartered entity starting with F, solved the "refusal to release servicing" problem by showing up with Federal Marshals carrying guns. Those loan files were handed over and servicing was released.
The S&L spent a zillion dollars in legal fees, trying to fight off its borrowers' breach of contract and specific performance claims. When borrowers sue for breach of construction loan disbursement obligations, the cases have to be fought one by one, so the fees really mount up.
The S&L also spent a zillion dollars in legal fees fighting to try to keep its loan servicing portfolio. A good time was had by all the lawyers.
Finally, FSLIC put the S&L out of its misery by seizing it, at the same time the TV stations announced that President Reagan had bombed Libya. At the time, I saw an analogy.
_________________ Aristotle
As Yogi Berra said "It's like deja vu all over again."
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