WASHINGTON -- The Federal Deposit Insurance Corp. issued a sharp rebuke Friday of an Internet video alleging the agency has let the new owners of failed IndyMac Bank unduly profit from the deal.
The Web clip, circulated this week by Fairfield, Calif.-based Thinkbigworksmall.com, claims among other things that the FDIC’s loss-sharing agreement with the thrift’s new owners allows them to profit from short sales and foreclosures, therefore discouraging loan modifications.
The video alleges the investors make money off the deal because loss-share claims are based on what a loan was originally worth, not what the acquirers paid for it.
In a statement, FDIC spokesman Andrew Gray called the video “blatantly false.” He said the agency has not begun paying loss-share claims to OneWest Bank – the new thrift formed by investors in March 2009 – because OneWest has to suffer $2.5 billion in losses before the agreement takes effect. He added that the deal covers a small fraction of the loans serviced by the thrift, and the institution must follow federal modification guidelines in order to receive loss-share claims.
“This video has no credibility. Regardless of the personal or professional motivations behind its production, there is always a responsibility to be factually correct and transparent,” Gray said.
Gray objected to other claims made by the clip’s producers, including that the FDIC has borrowed from the Treasury Department to shore up its finances. While the agency has borrowing authority from the Treasury, Gray said it has not been used.
“Indeed, we continue to be funded by the banking industry through assessments, not by taxpayers as claimed in the video,” he said.
To see the full statement and an accompanying fact sheet, visit www.fdic.gov/news/news/press/2010.