For much of the past year, IndyMac has been zigging while the rest of the troubled mortgage industry has been zagging.
The big California-based lender built a retail force of almost 1,500 people, largely by hiring workers from failed and troubled mortgage competitors.
Friday, however, the tables turned. IndyMac said it plans to cut 1,000 jobs, 10 percent of its total workforce, trim its stock dividend and possibly post a loss in the third quarter as it converts almost all of its business away from riskier borrowers to conforming loans that can be dealt to Fannie Mae and Freddie Mac.
Does that mean IndyMac’s aggressive growth strategy this past year was wrong? Too early to say, especially with the new specter of employment weakness looming. A prolonged period of job declines across the nation
would exacerbate the crisis for every mortgage lender.
IndyMac CEO Michael Perry is upbeat about his company’s prospects for the fourth quarter and 2008. And he does have at least one member of his board of directors who is expert at zigging and zagging under extremely stressful circumstances.
Pat Haden is a private equity investor with a law degree. He was also a pro bowl quarterback for the Los Angeles Rams, a Rhodes scholar, and a member of two national championship football teams at Southern Cal.
As Haden knows from the playing field, sometimes the best strategy is to go against conventional thinking and do the unexpected. In the coming months, we’ll find out if that approach worked for IndyMac.
Recession Fear Heightened as 4-Year Growth in Jobs Ends - New York Times
Click here to sign up for the Muckety Newsletter
1 Comments
#1. IndyMac’s Michael Perry has the toughest job in America | Muckety.com - See the news 07.09.2008
[…] my son.” As the mortgage mess initially unfolded, IndyMac tried to build market share by expanding while others in the troubled industry shrank. But that strategy […]
Leave a Comment