IndyMac Bought for $13.9 Billion – A Fishy Deal If You Ask Me!


The FDIC announced late today the sale of the remaining assets of the failed thrift, IndyMac, to a private consortium for $13.9 Billion. Dune Capital Management, J.C. Flowers & Co., and Paulson & Co. spear headed the buy in search of a rehabilitated servicing portfolio Sheila Blair reworked with her aggressive loan modification strategy.

This will make Dune and the consortium the 10th largest mortgage servicer in the country controlling approximately $16 billion in mortgages. The new owners will also get about $7 billion in other securities and the 33 branch retail reverse mortgage operation, Freedom Financial.

A Fishy Deal

A few things about the deal are little fishy…

One, the Paulson & Co. head honcho is John Paulson who made $15 billion with his hedge fund shorting the subprime mortgage-backed security markets. Nothing like making a ton of dough profiting from the subprime “perfect storm”…and then turning those profits into more profits by cherry-picking rehabbed assets after the storm subsides. These guys are making bank…literally…coming and going.

Two, the consortium bought IndyMac assets with a newly formed bank holding company they call IMB Management Holdings. As I revealed here on BiggerPockets in recent weeks, unfettered access to TARP Treasury funds is easy for bank holding companies. So it appears to me these uber-rich, incredibly well informed corporate raiders seem to be smart enough to “cover” themselves with a bank holding company. The plan being to just ask the Treasury to bail them out should anything go wrong with their new purchase!

Kleptocracy in Action

This plan is perfection in it’s simplicity.

If it all goes well…pocket these super-powerful members of the corporate ruling class make billions of dollars. If not…they are primed and ready for a multi-billion bailout.

Leave it to former subprime bankers and Wall Street insiders…the same folks that that made billions selling and securitizing subprime loans causing the banking crisis in the first place…not to mention a protracted recession we must all endure….to find a way to profit yet again.

It’s a “no loose” scenario for these guys. This is kleptocracy in action…brought to you by your friendly government regulators the FDIC, the Treasury, and the SEC.

Until next week…

About Author

Rob K. Blake, a 15 year veteran of the mortgage industry, is a renowned public speaker, author, and former radio talk show host. His blog,, is dedicated to educating mortgage consumers, mortgage providers, and investors about both mortgage and housing markets.


  1. January 5, 2009

    It has been reported in the news that Silar is a part of the consortium assembled by Steven T. Mnuchin, Chairman of Dune Capital Management LP, to purchase the IndyMac Bank.

    Silar is a co-defendant in a law suit in Federal Court in Las Vegas, Nevada (Case number 2:07-CV-00892-RCJ-GWF). Silar is the servicing agent for a portfolio of nearly one billion dollars of loans secured by First Trust Deeds. These loans are all in default, are severely distressed and are in arrears for past due taxes. The plaintiffs in this suit are nearly 3000, mostly elderly, lenders who are in danger of loosing their life savings.

    Silar is alleged to have violated it fiduciary duties and to be attempting to enrich itself at the expense of the lenders by claiming first priority in the collection of its own fees before payment of interest and repayment of principal to the lenders despite clear wording in the promissory notes and Loan servicing agreements that give priority to the lenders. The law suit also claims RICO statutes have been violated by Silar, and other co-defendants.

    Silar has also recently partnered with Michael A. Barron to form Liberty Capital Asset Management. The lenders are concerned that Silar and Liberty will be used to purchase tax liens on the properties securing the loans in the portfolio and wipe out the lenders equity.
    Liberty, an asset management company which acquires pools of non-performing mortgage loans and then re-performs those loans by restructuring the financial parameters, announced that it has executed an agreement with an affiliate of Silar Advisors to invest up to $50 million to acquire defaulted sub-prime mortgage pools at a discount. The agreement is viewed by both parties as a strategic venture through which Silar is providing the capital and valuation expertise and Liberty is providing the operational expertise that Liberty anticipates will allow it to liquidate the pools purchased at a profit. Liberty Chairman & CEO Michael A. Barron said, “The addition of Silar as a strategic partner to Liberty is a significant step forward for us in this space. We have spent months working out the details of this venture and we are pleased with the integration of our respective organizations.” Silar Advisors CEO Rob Leeds states, “We are happy to be a business partner with Liberty in this unique investment opportunity. We are uniquely suited to match up with Liberty’s expertise in the sub-prime loan repair market.”

    Silar’s new partner in Las Vegas, Barron, has a troubled history.

    Barron originally had a company called FINET, but he declared it bankrupt in 2003.

    Barron then created SHEARSON and became president. In an 8K filing with the SEC on 2008-04-08, Shearson Financial Network, Inc. (SHSNE) announced its intention to reorganize and seek relief under Chapter 11 bankruptcy protection. The firm had previously announced the appointment of Harry R. Kraatz as Chief Restructuring Officer, and discontinued all operations on 2008-03-27. They have delayed filing their 4th quarter results.

    In addition to its own net branch operation, the Henderson, NV based company is also the parent of Shearson Home Loans (SHL), a retail lender headquartered in Irvine, CA and having an office in Plantation, FL according to CityTownInfo.

    Licensing for the SHL office at SHSNE’s headquarters in Henderson, NV was revoked by final order on 2007-10-15 as reported in a Disciplinary Action Report by the State of Nevada Dept. of Business and Industry’s Mortgage Lending Division. An April 2007 archival copy of SHSNE’s web site stated that “SHL currently employs over 500 people which are residential mortgage professionals and is licensed in over 40 states.”

    The corporate web site and the web site for retail subsidiary Shearson Home Loans are no longer working.

    Shearson Home Loans is the subject of several IRS tax liens filed between 2007-01-04 and 2008-03-06 in Clark County, NV as well as a pending civil suit filed 2007-10-11 by Paychex Ach Inc., and other filings.

    Barron has now engineered a reverse merger with LIBERTY CAPITAL ASSET MANAGEMENT, become chairman and CEO, and partnered with Silar. Liberty has only two employees, (Barron and Sheary), just two guys and a laptop! (This is the reality despite what the news release says)

    I am one of these lenders. I am 76 years old and will probably lose most of my savings. I have been personally sued as a result of my efforts to help organize the lenders to defend themselves against Silar and its associates. I am therefore reluctant to disclose my name.

  2. I worked for Indymac Bank. I was with NYMC and we were acquired by Indymac in April of 2007. Indymac was a very poorly managed and ill-run company to say the least. Dune Capital bought a lot of junk. At least for them, they jettisoned all those shady mortgage brokers in July of 2008. Some of the same folks in management who led Indymac to their ruin are still there in Pasadena. I hear they’re moving everyone to Austin soon. Saddle up fellas! Trade your sushi lunches for TexMex fare.

  3. i sit here at the library preparing to represent myself at trial.
    my attorney quit after exhausting 100k o of my money.

    i am fighting cwide/bofa. their employee(s) helped steal my house and money. i will most likely get screwed at trial na dhave the house foreclosed in the end.
    i have spent 150+ for the house, in cash, in addition to the 100k for court costs yet this cannot tand upo to the billions they have and NO BODY CARES.

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