Indymac Bancorp, Inc. CEO Michael Perry at their Pasadena headquarters Feb. 20, 2008.
Indymac Bancorp, Inc. CEO Michael Perry at their Pasadena headquarters Feb. 20, 2008. (SGVN/Staff photo by Leo Jarzomb)

PASADENA - Another piece of the IndyMac Bank saga appears to be winding down.

In a deal reached last week with the Securities and Exchange Commission, former Indymac Chairman and CEO Micheal W. Perry agreed to pay a civil penalty of $80,000 to settle charges that he misrepresented the financial health of the ailing Pasadena-based bank before its collapse in July 2008. Perry neither admitted nor denied the allegation.

A judge dismissed other civil allegations against him.

In another action, IndyMac insurers will pay out $6.5 million to shareholders who purchased or otherwise acquired common stock in IndyMac Bancorp Inc., the bank's parent company, between March 1, 2007 and May 12, 2008.

That settlement - filed in U.S. District Court for the Central District of California, Western Division - will be distributed to members of a class-action lawsuit who submit proof of a claim before Jan. 18.

The amount each investor receives will depend on how much stock was owned.

Former IndyMac investor Roy Payo, 44, figures his payback won't amount to much - about 6 cents a share. Payo, who recently moved from Pasadena to Cerritos, owned close to $45,000 in IndyMac stock before the bank went under.

"I haven't had time to do any real research yet," he said. "I don't expect to see any amount that's substantial ... it's more like a symbol than anything else."

IndyMac Bancorp, through its main subsidiary, IndyMac Bank, made, purchased and sold residential mortgage loans.

Caught in the crossfire of a protracted downturn in the nation's housing and mortgage markets, IndyMac saw demand for its services fall off dramatically.

The decline - characterized by plummeting home prices, tightened credit standards and waves of home foreclosures - was fueled by a meltdown of the subprime mortgage market.

Only 3 to 4 percent of IndyMac's loan portfolio had been comprised of subprime loans, company officials said at the time. But many of the Alt-A loans IndyMac specialized in ultimately defaulted as mortgage rates reset at higher payment levels.

IndyMac's financial slide was already in motion when Sen. Charles Schumer, D-N.Y., sent a letter to federal regulators expressing concern that IndyMac "may have serious problems with its current loan holdings and could face a failure if prescriptive measures are not taken quickly."

Schumer's comments fueled a run on the bank as investors sought to pull their money out as quickly as possible. In the first 11 days that followed, IndyMac Bancorp Inc. depositors withdrew more than $1.3 billion from their accounts.

IndyMac's collapse ultimately became the costliest bank failure on record, with $13.1 billion paid by the Federal Deposit Insurance Corp.'s insurance fund through the end of last year.

Joan Aarestad, a former IndyMac depositor who lost several thousand dollars in the wake of the bank's meltdown, said her loss and scores of other depositors' losses resulted from simple mistakes the bank made.

The bank inadvertently structured many depositors' accounts so the money wasn't adequately insured by the Federal Deposit Insurance Corp., she said.

"We had no way of knowing that the mistake was made because the bank didn't provide copies of the signature cards," she said. "They listed my husband as a beneficiary, not an owner and that made a difference."

Aarestad said scores of former IndyMac depositors are still owed money. The bank re-emerged under new ownership in March of 2009 as OneWest Bank.

kevin.smith@sgvn.com

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