The loans that they made, which are now turning bad, to developers for the construction of subdivisions.

IndyMac tried to sell a $540 million loan portfolio, and it was ugly, “Winning bids on many of the loans were, on average, about 60 cents on the dollar, according to people familiar with the matter. But some winning bids were only about 20 cents on the dollar,” and there are a lot more loan packages, where the assets held by the developers are dropping in value, and even if the complete their projects no one wants to buy then.

This is why Office of Thrift Supervision noted that the number of S&Ls at “heightened risk of failure” has gone from12 in March to 17 now.

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