Michael Perry, former Chairman and CEO of IndyMac Bank, has started a blog - and the contents of it are a perfect summation of the entitled, indignant mindset of the American financial industry.
First, a bit of background on IndyMac Bank, courtesy of wikipedia:
The primary causes of IndyMac’s failure were largely associated with its business strategy of originating and securitizing Alt-A loans on a large scale. This strategy resulted in rapid growth and a high concentration of risky assets. From its inception as a savings association in 2000, IndyMac grew to the seventh largest savings and loan and ninth largest originator of mortgage loans in the United States. During 2006, IndyMac originated over $90 billion of mortgages.
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.
IndyMac often made loans without verification of the borrower’s income or assets, and to borrowers with poor credit histories. Appraisals obtained by IndyMac on underlying collateral were often questionable as well. As an Alt-A lender, IndyMac’s business model was to offer loan products to fit the borrower’s needs, using an extensive array of risky option-adjustable-rate-mortgages (option ARMs), subprime loans, 80/20 loans, and other nontraditional products. Ultimately, loans were made to many borrowers who simply could not afford to make their payments. The thrift remained profitable only as long as it was able to sell those loans in the secondary mortgage market. IndyMac resisted efforts to regulate its involvement in those loans or tighten their issuing criteria: see the comment by Ruthann Melbourne, Chief Risk Officer, to the regulating agencies.
IndyMac's chickens are coming home to roost. The SEC charged Perry with securities fraud in February of this year, and FDIC filed suit against him in July of this year to recover $600 million dollars in damages and costs related to residential home loans. There are numerous civil actions against him as well filed by individual mortgage holders.
What's a failed bankster to do? Hey, I know - start a blog!
This is how his "Not Too Big To Fail" blog begins:
My name is Michael Perry. I am the former Chairman and Chief Executive Officer of Indymac. I have kept silent for three years in the hope that I would be left alone and allowed to rebuild my professional life, but unfortunately that has not been the case. I have been forced to defend myself against unwarranted and false, public allegations.
Leave Michael Perry Aloooooooooone!
Isn't this great? Contribute the the crashing of the housing market and expect to be left quietly alone so he can 'rebuild his professional life', no doubt to emerge back on the scene to create even more chaos!
He goes on to the crux of the problem: not that their mortgage products were extremely risky, but that IndyMac failed before they could hit the TARP jackpot!
On July 11, 2008, Indymac Bank was seized by the Federal Deposit Insurance Corporation (FDIC) after a U.S. Senator’s inappropriate public statements during the financial crisis caused a “run on the bank” that rapidly depleted the bank’s ample liquidity. As a result of this bank run and the fact that Indymac was deemed by banking regulators to be “Not Too Big To Fail”, it was not around just a few months later, at the height of the financial crisis, to receive any of the significant and unprecedented assistance the government provided to every “Too Big To Fail” financial institution and hundreds of smaller financial firms. Without this assistance, many, if not most would have suffered the same fate as Indymac, including some of the largest and oldest firms.
Now, remember the Alt-A liar's loans based on stated income when you read the next part:
The plaintiffs know this and as a result do not want these matters to go to trial where they will lose. This is what happens in America today. Frivolous lawsuits rarely go to trial and nearly always settle despite their lack of merit, because of the time and cost to defend against them (and perversely having a “pot” of liability insurance, or even better a deep-pocket, corporate indemnification, encourages more lawsuits and more settlements). It is particularly disheartening though, to have U.S. government agencies like the SEC and FDIC engaged in this type of behavior in order to further their own image without regard to the damage done to the reputation, career, and finances of honest individuals like myself and others. And it’s not just me and my family that is adversely affected. I believe these legal tactics have a long-term cost to our country’s economic potential and erode our standards. In regard to my latter assertion, I don’t think most Americans are aware (I wasn’t until recently), but there is an exemption in our defamation laws that “privileges” plaintiff’s lawyers and allows them to distort facts and make untrue statements and defame defendants like myself, without any consequence, even if the defendant proves so later in a court of law. This doesn’t seem right, does it?
I had no idea that SEC and FDIC would take the time to burnish their images at the expense of 'honest' individuals at the expense of their reputation, career and finances! What IS this country coming to???
I don't blame Michael Perry for trying to defend himself. I do find his whiny, "I'm the victim" attitude appalling given the role that IndyMac and their mortgage products played in the crash of the housing bubble. The real victims are the ones who have lost their homes, or the people who now live in abandoned communities thanks to Perry's Alt-A frenzy. It's the Leave Michael Perry aloooooone attitude that is helping to fuel the Occupy movements - and his blog is bound to add fuel to the fire.