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I got a call from an Indymac borrower who asked that his name not be used. He and his wife bought a three bedroom townhouse in the Los Angeles suburb of Chatsworth for $525,000 in March 2006. He says that two weeks after closing on the home he got a letter from Indymac asking him to confirm info on the mortgage application. “Suddenly it had all these numbers we’d never seen before,” he says. They included income inflated by 30%.
He called his independent mortgage broker and was told it was just normal procedure; they do this so they can sell the loans. The broker provided him with a letter from Indymac asking the broker for the changes. By the time the bank had asked the borrower to confirm the new numbers, he says he’d already moved in. He signed the papers. “We unwittingly participated in this fraud out of fear,” he says.
Today the townhouse has dropped some 20% in value. With the economy slow, the independent software engineer is having troubled making the $3,800 a month house payments. He’s looking to renegotiate the loan. Yesterday he called an Indymac customer service hotline and was told the hold time would be seven hours.
“I was very frustrated reading in the papers that it was the borrowers that brought down Indymac,” he says. “There was definitively an effort on Indymac’s part to fraudulently complete my loan. I’d have been a lot happier if they had just denied it.”