Are the holders of IndyMac (indymac's) mortgage backed securities in the same shape as before liqiudation?

Question

Despite Indymac's liquidation, aren't indymac's mortgage backed securities as good as before their liquidation? If not, what am I missing?

We all agree that Mortgage Backed Securities (MBS) supply investors (such as a pension funds) with a flow of capital from home owners. Indymac, or for that matter fannie mae or freddy mac, are just the companies selling the MBS's. It's really whether the homeowners pay their home loans back or default that determine the fate of the MBS holders. So in this case, I don't see any addt'l losses to IndyMac's MBS holders than before IndyMac's liquidation, however, if i'm wrong, I welcome being set straight. Thanks.

Answer 1

Straight MBS structured by indy mac is remote from the banks problems.  While the securities are probably much weaker than when issued, they should not be impacted by the FDIC's takeover of indymac.  tba

Answer 2

You might be in luck.  Now that the FDIC has control of IndyMac's mortgage portfolio, it is very likely that homeowners in default will see their loans restructured rather than foreclosed upon.

CNN had an interesting article this issue today:

http://money.cnn.com/2008/07/17/news/eco...

Is your loan owned by IndyMac or just serviced by them?  It is possible that the FDIC is limited in its ability to restructure loans that are just serviced by IndyMac, but the jury is still out here.

Good luck