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Financial crisis of 2007–2008

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IndyMac: consistency
IndyMac often made loans without verification of the borrower’s income or assets, and to borrowers with poor credit histories. Appraisals obtained by IndyMac on underlying collateral were often questionable as well. As an Alt-A lender, IndyMac’s business model was to offer loan products to fit the borrower’s needs, using an extensive array of risky option-[[Adjustable-rate mortgage|adjustable-rate-mortgages]] (option ARMs), subprime loans, 80/20 loans, and other nontraditional products. Ultimately, loans were made to many borrowers who simply could not afford to make their payments. The thrift remained profitable only as long as it was able to sell those loans in the [[secondary mortgage market]]. IndyMac resisted efforts to regulate its involvement in those loans or tighten their issuing criteria: see the comment by Ruthann Melbourne, Chief Risk Officer, to the regulating agencies.<ref name="">{{cite web|url=|title=Archived copy|accessdate=March 18, 2010|deadurl=yes|archiveurl=|archivedate=April 19, 2009}} Audit Report Office of Inspector General</ref><ref>{{cite web|url=|title=FDIC: Press Releases - PR-1-2009 1/2/2009||accessdate=July 11, 2017}}</ref><ref>{{cite web|url= |title=Archived copy |accessdate=2014-02-24 |deadurl=yes |archiveurl= |archivedate=February 16, 2012 }}</ref>
May 12, 2008, in a small note in the "Capital" section of its what would become its last [[10-Q]] released before receivership, IndyMac revealed – butrevealed—but did not admit – thatadmit—that it was no longer a well-capitalized institution and that it was headed for insolvency.
IndyMac reported that during April 2008, [[Moody's]] and [[Standard & Poor's]] downgraded the ratings on a significant number of [[Mortgage-backed security]] (MBS) bonds—including $160 million issued by IndyMac that the bank retained in its MBS portfolio. IndyMac concluded that these downgrades would have harmed the Company's risk-based capital ratio as of June 30, 2008. Had these lowered ratings been in effect at March 31, 2008, IndyMac concluded that the bank's capital ratio would have been 9.27% total risk-based. IndyMac warned that if its regulators found its capital position to have fallen below "well capitalized" (minimum 10% risk-based capital ratio) to "adequately capitalized" (8–10% risk-based capital ratio) the bank might no longer be able to use brokered deposits as a source of funds.