The one thing with lending and financial companies is, once bad news comes out, it very often is terminal. IndyMac, one of the largest mortgage lenders, announced yesterday that they were not making any new housing loans going forward and cutting 3,800 of their 7,200 jobs.

From the IndyMac blog:

Unfortunately, the above actions will necessitate the reduction in our present workforce from approximately 7,200 to roughly 3,400 or so over the next couple of months, which should reduce our operating expenses by roughly 60%. We will retain about 1,100 employees in loan servicing in Kalamazoo and Austin; 350 in our servicing retention group in Irvine and Kansas City; 800 at Financial Freedom, primarily in Irvine, Sacramento, and Atlanta; 400 in our Southern California retail and web bank; 500 in portfolio management and administration, largely in Pasadena; and 250 in discontinued businesses.

The company essentially is hitting lockdown mode hoping to ride out the worst of the storm. I wish them luck, it is going to be a very rocky road.

In a letter sent to shareholders, IndyMac Bancorp (IMB 0.71) stated it has not been successful with efforts to raise additional capital. Further, the company does not expect to be able to raise capital until there is more stability and less uncertainty in the housing and mortgage markets.

Based on information provided to regulators, the bank is no longer considered well capitalized. IndyMac has been asked to submit a new business plan for review and approval as a result. via Briefing.com

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