So I logged into work this morning, and the hot rumor floating around cyberspace is that IndyMac, one of (if not the) largest banks in Southern California either has been seized by Federal Regulators, or is very, very close to going under. According to the always reliable (sarcasm) wikipedia, IndyMac is the 7th largest mortgage loan originator in the US, having doled out a good chunk of the toxic option-ARM loans, HELOCs, and other bad loans that have plagued the California real estate market over the last few years.
The problems at IndyMac aren’t coming out of the blue. Senator Charles Schumer (D-NY) raised the possibility of problems at the bank a few weeks ago. Maybe this is one of the ‘large financial institutions‘ Treasury Secretary Paulson was talking about last week?