Indy Mac’s Wholesale is Gone.

For those that thought the mortgage markets and the liquidity crisis was over, think again. Indy Mac Bank Corporation just posted a blog entry saying they will cease all wholesale mortgage operations and slash more than half of its approximately 7,200 employees. Below is an excerpt from their corporate blog.

As a result of the above, we have made the difficult decision, effective July 7, 2008, that we will no longer accept any new loan submissions or rate locks in our retail and wholesale forward mortgage lending channels, except for our servicing retention channel. We plan to honor all of our existing rate-locked loans and will continue to fund these loans in the coming weeks. While the managers and employees in these units have worked incredibly hard, these units are not currently profitable due to the continuing erosion of the housing and mortgage markets. At the same time, these operations take up significant balance sheet capacity and “feed” growth in the servicing asset, an asset we need to shrink given its size relative to our existing capital.