[5] The FDIC put the assets up for auction and the bulk of the business was sold to IMB HoldCo LLC who turned this into OneWest Bank.

In 1997, Countrywide spun off IndyMac as an independent company run by Mike Perry, who remained its CEO until the downfall of the bank in July 2008.

[8] In July 2000, IndyMac Mortgage Holdings, Inc. acquired SGV Bancorp, the parent of First Federal Savings and Loan Association of San Gabriel Valley.

IndyMac's aggressive growth strategy, use of Alt-A and other nontraditional loan products, insufficient underwriting, credit concentrations in residential real estate in the California and Florida markets, and heavy reliance on costly funds borrowed from the Federal Home Loan Bank (FHLB) and from brokered deposits, led to its demise when the mortgage market declined in 2007.

In the 10-Q filing, the company stated it expected "to have an even higher level of non-performing loans in the future due to the continued market disruption".

This ratio, which factors in asset quality and loan-loss reserve coverage, needs to be at least 10% for an institution to be considered well-capitalized under regulatory guidelines.

While the run was a contributing factor in the timing of IndyMac's demise, the underlying cause of the failure was the unsafe and unsound manner in which the thrift was operated.

On the same day, IndyMac also announced the closure of both its retail lending and wholesale divisions, halted new loan submissions, and cut 3,800 jobs.

[33] IndyMac's dire condition and the failure of regulators resulted in something of a bank run after Senator Charles Schumer warned the public of them.

Mr. Reich spoke widely of “dissemination of incomplete or erroneous information” and “rumors and innuendo” and the “strict policy of privacy” at OTS and FDIC.

[34] Mr. Reich would later be forced to remove OTS western regional director Darrel W. Dochow, for improperly allowing 5 banks to make backdated capital adjustments.

[35] A February 26, 2009 report by the Office of Inspector General for the Treasury Department would later conclude that IndyMac was already a doomed institution and that Prompt Corrective Action should have been taken in May 2008.

[36] IndyMac backdated an $18 million contribution from its parent company in order to preserve the bank's appearance as a “well-capitalized” institution.

It also would have prevented IndyMac from luring new customers by offering deposit rates which exceeded the limitations prescribed in FDIC regulations.

[37] On February 26, 2009, the Treasury Department's inspector general concluded that federal regulators failed to catch warning signs that presaged the IndyMac Bank's collapse.

The U.S. government watchdog said the Pasadena, Calif., savings and loan pursued an overly aggressive growth strategy that included failing to verify borrowers' income and relying on expensive deposits to fund its operations.

“We found that OTS identified numerous problems and risks, including the quantity and poor quality of nontraditional mortgage products,” the report said.

The Treasury inspector general found that the letter was a “contributing factor” in the timing of IndyMac's collapse, but that “the underlying cause of the failure was the unsafe and unsound manner in which the thrift was operated”.

[38] On March 27, 2009, A spokesman said the U.S. Treasury Inspector General is reviewing actions by the Office of Thrift Supervision on backdating banks’ capital injections after the regulator's acting director was removed and placed on leave.

Inspector General Eric Thorson gave findings “regarding certain actions by management” at OTS to Treasury Secretary Timothy Geithner, replaced Acting Director Scott Polakoff pending an investigation, according to separate statements.

The OTS permitted five banks, including failed lender IndyMac Bancorp Inc., to revise capital reports for the first quarter to show higher levels after the period ended.

[35] On June 30, 2008, the Center for Responsible Lending, a Washington think tank, released a report compiling information from various lawsuits filed by customers and former employees of IndyMac Bank, and alleged that managers and supervisors were being pressured to approve loans or risk being fired.