IndyMac Says Its Subprime Exposure Is Minimal

In light of the recent "panic" on Wall Street surrounding weakness in subprime lending, IndyMac Bancorp said this morning in a statement that it carries "minimal exposure" to subprime loans, and that its credit performance statistics are reflective of prime/Alt-A lending. Of its $90 billion in mortgage loan production in 2006, only 3% was subprime. CEO/Chairman Michael W. Perry: "Clearly, the mortgage market and, in particular, the secondary market for mortgages are in a state of irrational panic right now, making it virtually impossible to predict short-term loan production and sales volumes or earnings with any reasonable precision until things settle down." IndyMac was hard hit by the global liquidity crisis of 1998, it said, due to its then-status as a mortgage REIT. "After that experience, IndyMac decided to shed its mortgage REIT structure, so that we would never again subject ourselves to this kind of liquidity risk." In pre-market trading, shares are up 7% to $30.90.

Sources: Press Release, MarketWatch
Commentary: Stifel: Subprime Mortgage Sector in 'Downward Spiral' • Short Plays for More Housing Market Weakness • Weak Housing Forecasts Foretell Further Downside
Stocks/ETFs to watch: IndyMac Bancorp Inc. (NDE)