But the failure was almost expected by everyone, knowing the fact that the bank was laying off its employees and closing many branches to cope up with the heavy losses in the recent years. Lots of analysts have earlier predicted the collapse of the company as the stock price of bank even crashed to $1. The air is full of speculations that the Federal government will also take over mortgage giants like Fannie Mae and Freddie Mac, which are responsible for almost half of the mortgaged debt of the nation.

Due to these rumors, the shares of these two companies fell by a heavy margin to let the Dow Jones industrial average drag down by almost 1.1% and the points table closed at 11,100.54 at the end of the session. Now the analysts are concerned that these giants will need to put up extra efforts and raise extra dollars to balance the expected losses that will steam from mortgage defaults. But they are saying that these companies will not be able to offset these loses as there is no scope in the private market.

Coming back to IndyMac, the company has been under close analysis for the last six months, when the OTS depicted the ill health of the company.    Due to the result of sour home loans, the bank lost almost $614.8 million in the year 2007 and $184.2 million in the first quarter of this financial year. The company was a leader in its department and posted a profit of $342.9 million in the year 2006, but
its loan losses ballooned later, after a gradual slow down of the real estate market.

Earlier IndyMac was selling and closing offices but it reconstructed its business to focus only on  conforming loans, that are small mortgages made to people with good credit. These can be resold on the secondary market as soon as possible. But according to the analysts, it was unclear whether the moves would prove sufficient to save the already done damage.

"This institution failed today due to a liquidity crisis," John M. Reich, director of the OTS, said at a news conference Friday afternoon. "Although this institution was already in distress, the deposit run pushed IndyMac over the edge."

The number of employees in the institution once reached to 10,000, but it later fell victim to a classic run on the bank. The regulators are blaming Sen. Charles E. Schumer (D-N.Y.) (CHAIRMAN SEN. CHARLES E. SCHUMER) for having fueled these massive withdrawals. On June 26, Schumer said in letters to the FDIC, the OTS and two other federal agencies that IndyMac might have "serious problems" with its loan holdings.

"I am concerned that IndyMac’s financial deterioration poses significant risks to both taxpayers and borrowers," Schumer wrote. The bank "could face a failure if prescriptive measures are not taken quickly." This kind of public warning influenced the depositors to pull $1.3 billion out of their accounts between June 27 and the present time.

Schumer said that the sole reason of this failure was "poor and loose lending practices" that should have been prevented earlier only. Later, a Schumer spokesman said: "Mr. Reich, a political appointee, should be spending less time playing politics and more time doing his job."

The New York branch of UBS has agreed to contribute specified balances of loans to the platform as part of a strategic alliance with Impac. As per the deal, Impac will issue to UBS, warrants to purchase up to 2 percent of its current outstanding stock.

Impac will combine the special servicing platform with its master servicing, default department and real estate auction business.

According to Impac Chief Executive, Joseph Tomkinson, “This acquisition will allow the company to take advantage of the existing market conditions to subservice for others, along with, buying and then servicing ourselves currently available mortgage assets in the secondary market. The special servicing platform will be combined with our master servicing, default department, and real estate auction business to synergistically work together as a fully integrated platform to maximize the success of opportunistic investments in mortgage assets. We believe this will be a valuable component as the Company moves ahead on executing certain proposed initiatives.”

On May 14, Impac had about 76.1 million shares of common stock outstanding. Based on the company’s closing price on Friday of 81 cents, UBS would receive warrants to acquire about 1.5 million shares of Impac’s stock, worth about $1.2 million.

Earlier in the month, Impac refinanced debt with a term loan from UBS. As part of the refinancing deal, Impac agreed to issue UBS warrants to purchase up to 7 percent of the mortgage company’s outstanding common stock.

When it comes to home loans, there are several types of loans such as first mortgage, a second mortgage, a refinance loan, a home equity loan, a home equity line of credit, a debt consolidation loan and even a bad credit loan. The important thing to remember is that, since home loans are varied the best ones are those that suit your needs best.

Different types of loans are explained as follows, that would help you choose the one which is most apt.

First Mortgage: The mortgage loan is secured (protected) by the lender putting a claim on the house that you purchase with the loan. These loan programs are most flexible. They are taken at a fixed or a variable interest rate.

A Refinance Loan: This sort of a loan replaces the original loan on your property with a new loan. These loans are sometimes use to lower your mortgage interest rate, take out equity in your home, to consolidate several home loans on your property.

Second Mortgage: This is a mortgage loan that is secondary to the first mortgage. This implies that in a case wherein you’ve defaulted on your loan, the first mortgage lender would have first rights to your property before the second lender stakes his claims. The rate of interest on these loans is higher since the risk for the lender is higher too.

Home Equity Loan: These loans are generally faster and easier to get than a mortgage. It’s used to take out equity from your home without refinancing your original loan.

Home Equity Line of Credit (HELOC): This loan is secured by a claim against your home and is tax deductible. With these loans you can withdraw cash only as needed, and the loan can stay open for about 15 to 25 years.