Comments on: The Taxpayer is Paying IndyMac Bank to Foreclose on You? http://chrisgrande.com/2010/02/12/the-taxpayer-is-paying-indymac-bank-to-foreclose-on-you/ Taking the Road Less Traveled Makes ALL the Difference Wed, 09 May 2012 00:02:09 +0000 hourly 1 http://wordpress.org/?v=3.3.2 By: Chris Grande http://chrisgrande.com/2010/02/12/the-taxpayer-is-paying-indymac-bank-to-foreclose-on-you/comment-page-1/#comment-10489 Chris Grande Mon, 12 Apr 2010 16:01:19 +0000 http://chrisgrande.com/?p=1235#comment-10489 Hi John, You are correct. However, if they actually lose too much, the FDIC (i.e. you and me and the rest of the taxpayers) will cover the losses. What is most egregious though, is that, according the the real estate broker who did the analysis, OneWest could profit from the FDIC "loss coverage." For example (taking from the broker's analysis): if Onewest purchases a mortgage at 70% of par value, and sells for 75%, they will profit but they will also get a kickback from FDIC because FDIC will reimburse "losses" based on the PAR value (100%). So if FDIC covers the loan to 85%, they will give OneWest another 10% from FDIC money. As you can see, this is not covering real losses, only losses based on the FDIC par value formula. Hi John,

You are correct. However, if they actually lose too much, the FDIC (i.e. you and me and the rest of the taxpayers) will cover the losses.

What is most egregious though, is that, according the the real estate broker who did the analysis, OneWest could profit from the FDIC “loss coverage.”

For example (taking from the broker’s analysis): if Onewest purchases a mortgage at 70% of par value, and sells for 75%, they will profit but they will also get a kickback from FDIC because FDIC will reimburse “losses” based on the PAR value (100%). So if FDIC covers the loan to 85%, they will give OneWest another 10% from FDIC money.

As you can see, this is not covering real losses, only losses based on the FDIC par value formula.

]]> By: John Novick http://chrisgrande.com/2010/02/12/the-taxpayer-is-paying-indymac-bank-to-foreclose-on-you/comment-page-1/#comment-10488 John Novick Mon, 12 Apr 2010 14:59:23 +0000 http://chrisgrande.com/?p=1235#comment-10488 As I understand your example Onewest still has to sell this house to make any money. Is that right or did I miss something As I understand your example Onewest still has to sell this house to make any money. Is that right or did I miss something

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