Indy Mac Video is Blatantly False!

Last week I saw a video forwarded to me done by two guys from Fairfield. In their video for "Think Big, Work Small" these two guys reported on a sweetheart deal Bank One West got for the purchase of Indy Mac which went bust in 2008.

Basically the video suggested that Bank One West, and their Goldman Sachs investors, paid 70 cents on the dollar for 1st deeds. Then they sold them at market rates and charged back the FDIC with a loan loss provision and made the borrower sign a promissory note for $75000. It strongly suggested that Bank One West was milking the FDIC and taxpayers.

I thought about posting the video then, but couldn't verify any of the allegations the video made. This proved to be right. Although the video is well done it is inaccurate in its facts, and thereby the video is blatantly false as reported by the FDIC.

FDIC Director of Public Affairs Andrew Gray said Friday, "It is unfortunate but necessary to respond to blatantly false claims in a web video that is being circulated about the loss sharing agreement between the FDIC and One West Bank. Here are the facts: One West Bank has not been paid one penny by the FDIC in loss-share claims. The loss share agreement is limited to 7% of the total assets of Bank One West, and One West must take more than 2.5 Billion in losses before it can make a loss-claim on owned assets. In order to be paid through loss share, One West must adhere to the Home Affordable Modification Program.

The producers of this video perpetuate other falsehoods. The FDIC has not requested to borrow money from the Treasury Department. Indeed, we continue to be funded by the banking industry through assessments, not by taxpayers as indicated in the video.

The video has no credibility. Regardless of the personal or professional motivations behind its production, there is always a responsibility factually correct and transparent. The FDIC made available a fact sheet on the day that the sale of Indy Mac was announced that details the terms of the contract. Its too bad the creators of this video opted to premise it on falsehoods."

What video producers and the FDIC both missed or chose not to mention is under the HAMP any property supported by the loss share provision, the original borrower is released from any further financial obligations to their property and cannot be pursued for any loss. The borrower in the video would not have had a $75000 promissory note to sign since the HAMP program strictly prohibits it.

The Indy Mac terms are posted on the FDIC website and it is true. Too bad for the Fairfield Boys, I liked the idea but before you go public you better get the facts right!