By ALLEN P. ROBERTS Jr.
The Irvine subprime lending unit of IndyMac Bancorp Inc. on Friday said it’s raised its minimum borrowing standards and cut back on loans to borrowers who aren’t able to document income.
Pasadena-based IndyMac said that had it taken the actions at the beginning of the year they would have prevented $19 million in losses so far this year. The move comes amid rising defaults in the subprime mortgage sector.
The still said it expects continuing “high” credit losses in the second quarter, but those losses will reduce over time as new loans issued under the tighter credit standards form a larger portion of its portfolio.
IndyMac added that it plans to replace some of its lost revenue by offering new products, including no-money-down loans that require mortgage insurance.
Roberts is a staff write with the Los Angeles Business Journal.
