FBI ‘probes US mortgage lender’

Failed Californian mortgage lender IndyMac is reportedly being probed by US officials over suspected fraud.

Media reports say the Federal Bureau of Investigation (FBI) inquiry involves the bank’s practice of giving home loans to risky borrowers.

The FBI would not name IndyMac, but said it had widened its investigation of the US sub-prime mortgage industry to 21 firms, up from 19.

IndyMac was seized by US regulators amid fears it was running out of cash.

More gloom

Concerns about IndyMac’s finances amid tumbling home prices and rising foreclosures prompted a run on the bank by panicked customers.

Concerned that it would be unable to meet all depositers’ withdrawals, the bank’s primary regulator, the Office of Thrift Supervision (OTS), seized its operations and transferred them to the Federal Deposit Insurance Corporation (FDIC), which will seek a buyer.

As of 31 March, the bank had total deposits of $19bn (£9.5bn).

People with deposits of up to $100,000 each are covered by insurers.

But about 10,000 people had uninsured funds over that limit with IndyMac – worth a total $1bn at the time of closing last week.

The bank said it did not know anything about the investigation prior to reading about it in various media reports.

“We’re not in a position to confirm or deny (the investigation) because it’s an uncorroborated press account,” said an IndyMac spokesperson.

He added: “It shouldn’t be surprising that there is an investigation because of the size of the bank failure.”