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With the failure of IndyMac Bank on the heels of the fire sale of its big sister, Countrywide, it seems fitting to reflect on the market impact these companies have had industry wide and on homeowners across the nation. One lesson learned in life is that no company or individual is as good or bad as described by the press or perceived by the general public. Often success and reputation are a combination of luck, timing and talent, as the fate of IndyMac and Countrywide illustrate.

Over the last year it is been trendy to vilify these companies and their executive management, painting them with the same brush as the other short term players that drove the proliferation of aggressive mortgage products in the pursuit of collateral to securitize and outsized profits.. Unfortunately, long term success often breeds arrogance. Strategic errors, motivated by the belief that it was reasonable to succeed in the face of seemingly insurmountable headwinds ( accelerating credit deterioration, falling housing prices, illiquidity and intense competition for capital), compounded with this arrogance to drive these long time staples of the mortgage industry to failure in the unprecedented environment that crippled so many other financial institutions.

IndyMac and Countrywide leave behind a positive legacy that goes well beyond the more recent circumstances leading to their demise. That legacy includes a long history of innovation, leadership and market competition that has aided thousands, if not millions, of homeowners over the years. Included in this legacy are:

• The development of suitable mortgage products that met the diverse socioeconomic demographics that became the hallmark of America’s homeownership goals. While in recent years many products could be fairly characterized as aggressive and unsuitable for some borrowers, there is a much longer history of developing innovative and affordable non –conforming products that put deserving Americans into homes;
• The continued pursuit of a quality oriented credit culture that aligned with a core mortgage banking business of considerable scale. These companies were not the lenders of last resort, regardless of the product type. Mortgage brokers nationwide often found these companies more difficult to work with and redirected business to mortgage banking companies with weaker credit cultures and quality requirements. Even so, ill conceived products combined with rapidly declining market conditions can overwhelm the best of intents;
• Setting the standard for technology platforms designed to improve the credit process, customer service and loan servicing;Increasing market competition despite their beginnings as affiliated entities. The intense competitive attitude towards each other saved homeowner’s thousands of dollars, particularly in the non-conforming Alt-A arena.
• Increasing market competition despite their beginnings as affiliated entities. The intense competitive attitude towards each other saved homeowner’s thousands of dollars, particularly in the non-conforming Alt-A arena.

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