IndyMac is abandoning its forward mortgage origination business and focusing on Financial Freedom, its reverse mortgage unit, according to published reports.
Chief Executive Mike Perrys letter posted on IndyMacs corporate blog cited regulatory pressure to maintain capital levels as a culprit of the companys shift away from its mortgage business.
Perry said that the mortgage units are not currently profitable due to the continuing erosion of the housing and mortgage markets.
As of Monday, IndyMac will no longer accept any new loan submissions or rate locks in its retail and wholesale forward mortgage lending channels, except for its servicing retention channel, and will cut nearly half of its 7,200 staff members over the next couple of months.
The company also said it plans to honor all its existing rate-locked loans and continue to fund them.
