##### Table of Contents



UNITED STATES SECURITIES AND
    EXCHANGE COMMISSIONWashington, D.C.
    20549
       Form 10-Q
   þ

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934For the quarterly period ended
    September 30, 2007oro

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the transition period
    fromto   Commission file number 1-8972
  INDYMAC BANCORP, INC.
 (Exact name of registrant as
    specified in its charter)
  Delaware(State or other jurisdiction
    of
    incorporation or organization)

95-3983415(I.R.S. Employer
    Identification No.)888 East Walnut Street,
    Pasadena, California(Address of principal
    executive offices)

91101-7211(Zip
    Code)   (Registrants telephone number, including area code)(800) 669-2300
   þ o
  Rule 12b-2
  þ o o
  Rule 12b-2 o þ
    Common stock
    outstanding as of October 31, 2007: 80,488,799 shares




---



##### 



FORM 10-Q
    QUARTERLY REPORT
    For the Quarter Ended September 30, 2007
    TABLE OF CONTENTS
  PagePART I. FINANCIAL INFORMATIONForward-Looking Statements


3Item 2. Managements Discussion and
    Analysis of Financial Condition and Results of Operations


4Overview


4Selected Consolidated Financial Highlights


5Summary of Business Segment Results


9Consolidated Risk Management Discussion


33Expenses


52Prospective Trends and Future Outlook


53Off-Balance Sheet Arrangements


53Aggregate Contractual Obligations


54Critical Accounting Policies and Judgments


54Other Considerations


54Appendix A: Additional Quantitative
    Disclosures


55Item 3. Quantitative and Qualitative
    Disclosures About Market Risk


72Item 4. Controls and Procedures


72Item 1. Financial Statements
    (Unaudited)


73Consolidated Balance Sheets


73Consolidated Statements of Operations


74Consolidated Statements of Changes in
    Shareholders Equity and Comprehensive Income (Loss)


75Consolidated Statements of Cash Flows


76Notes to Consolidated Financial Statements


77PART II. OTHER INFORMATIONItem 1. Legal Proceedings


82Item 1A. Risk Factors


82Item 2. Unregistered Sales of Equity
    Securities and Use of Proceeds


83Item 6. Exhibits


83EXHIBIT 4.1EXHIBIT 4.2EXHIBIT 10.1EXHIBIT 10.2EXHIBIT 10.3EXHIBIT 31.1EXHIBIT 31.2EXHIBIT 32.1EXHIBIT 32.2   2




---



##### Table of Contents



PART I.
    FINANCIAL INFORMATION
  FORWARD-LOOKING
    STATEMENTS
  Form 10-Q Form 10-K, Form 10-Q, Form 8-K. Form 10-K 10-K)
   3




---



##### Table of Contents



ITEM 2.
    MANAGEMENTS
    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
    OPERATIONS  OVERVIEW
    1
    1
 4




---



##### Table of Contents



SELECTED
    CONSOLIDATED FINANCIAL HIGHLIGHTS
    Three Months EndedSeptember 30,


June 30,


March 31,


December 31,


September 30,2007


2007


2007


2006


2006Balance Sheet Information (at period end)(1)Cash and cash equivalents

$
785


$
618


$
577


$
542


$
521Securities (trading and available for sale)


5,732



5,608



5,253



5,443



4,950Loans held for sale


14,022



11,762



10,511



9,468



8,341Loans held for investment


8,553



8,648



8,988



10,177



10,030Allowance for loan losses


(162
)


(77
)


(68
)


(62
)


(61
)Mortgage servicing rights


2,490



2,387



2,053



1,822



1,631Other assets


2,313



2,713



2,380



2,105



1,973Total Assets

$
33,733


$
31,659


$
29,694


$
29,495


$
27,385Deposits

$
16,775


$
11,747


$
11,452


$
10,898


$
10,111Advances from Federal Home Loan Bank


11,095



10,873



10,350



10,413



9,333Other borrowings


2,189



4,527



4,313



4,637



4,595Other liabilities and preferred stock in subsidiary


1,803



2,462



1,525



1,519



1,409Total Liabilities and Preferred Stock in Subsidiary

$
31,862


$
29,609


$
27,639


$
27,467


$
25,447Shareholders Equity


1,871



2,050



2,055



2,028



1,938Income Statement Information(1)Net interest income

$
142


$
149


$
135


$
133


$
137Provision for loan losses


(98
)


(17
)


(11
)


(9
)


(5
)Gain (loss) on sale of loans


(251
)


101



118



165



160Service fee income


213



86



49



22



21Gain (loss) on MBS


(94
)


(46
)


(5
)


(4
)


19Fee and other income


46



25



16



13



14Net revenues


(42
)


298



302



320



346Total expenses


(283
)


(224
)


(216
)


(211
)


(203
)(Provision) benefit for income taxes


122



(29
)


(34
)


(36
)


(56
)Net earnings (loss)

$
(203
)

$
45


$
52


$
72


$
86Operating DataSFR mortgage loan production

$
16,816


$
22,505


$
25,569


$
25,946


$
23,968Total loan production(2)


17,062



23,023



25,930



26,328



24,439Mortgage industry market share(3)


3.06
%


3.24
%


4.05
%


3.76
%


3.44
%Pipeline of SFR mortgage loans in process (at period end)

$
7,421


$
13,376


$
16,112


$
11,821


$
14,556Loans sold


13,009



20,194



24,537



23,417



19,508Loans sold/SFR mortgage loan production


77
%


90
%


96
%


90
%


81
%SFR mortgage loans serviced for others (at period end)(4)

$
173,915


$
167,710


$
156,144


$
139,817


$
124,395Total SFR mortgage loans serviced (at period end)


192,629



183,574



171,955



155,656



139,022Average number of full-time equivalent employees
    (FTEs)


9,890



9,431



8,755



8,477



8,186Per Common Share DataBasic earnings (loss) per share(5)

$
(2.77
)

$
0.62


$
0.72


$
1.02


$
1.25Diluted earnings (loss) per share(6)


(2.77
)


0.60



0.70



0.97



1.19Dividends declared per share


0.50



0.50



0.50



0.50



0.48Dividend payout ratio(7)


(18
)%


83
%


71
%


52
%


40
%Book value per share (at period end)

$
24.31


$
27.83


$
27.93


$
27.78


$
27.35Closing price per share (at period end)


23.61



29.17



32.05



45.16



41.16Average Shares (in thousands):Basic


73,134



72,412



72,297



71,059



68,866Diluted


73,134



73,976



74,305



74,443



72,286Performance RatiosReturn on average equity (annualized)


(39.15
)%


8.62
%


10.45
%


14.56
%


18.27
%Return on average assets (annualized)


(2.18
)%


0.50
%


0.60
%


0.85
%


1.17
%Net interest margin, consolidated


1.78
%


1.92
%


1.77
%


1.76
%


2.13
%Net interest margin, thrift(8)


2.37
%


2.29
%


2.11
%


2.09
%


2.50
%Mortgage banking revenue (MBR) margin on loans
    sold(9)


(1.54
)%


0.80
%


0.68
%


0.91
%


1.03
%Efficiency ratio(10)


483
%


71
%


69
%


64
%


58
%Operating expenses to total loan production


1.58
%


0.97
%


0.83
%


0.80
%


0.83
%Balance Sheet and Asset Quality RatiosAverage interest-earning assets

$
31,695


$
31,255


$
31,030


$
29,868


$
25,507Average assets


36,833



35,837



35,341



33,765



29,140Average equity


2,054



2,078



2,033



1,969



1,871Debt to equity ratio (at period end)(11)


16.1:1



13.2:1



12.7:1



12.8:1



12.4:1Tier 1 core capital ratio (at period end)(12)


7.48
%


8.10
%


7.41
%


7.39
%


7.60
%Risk-based capital ratio (at period end)(12)


11.79
%


12.09
%


11.28
%


11.72
%


11.62
%Non-performing assets to total assets (at period end)(13)


2.46
%


1.63
%


1.09
%


0.63
%


0.51
%Allowance for loan losses to total loans held for investment (at
    period end)


1.89
%


0.89
%


0.75
%


0.61
%


0.61
%Allowance for loan losses to non-performing loans held for
    investment (at period end)


47.64
%


36.07
%


44.11
%


57.51
%


77.43
%  5




---



##### Table of Contents



(1)
    
    The items under the balance sheet and income statement sections
    are rounded individually and therefore may not necessarily add
    to the total.(2)
    
    Total loan production includes newly originated commitments on
    builder construction loans as well as commercial real estate
    loan production, which started in March 2007.(3)
    
    Mortgage industry market share is calculated based on our total
    SFR mortgage loan production, both purchased (correspondent and
    conduit) and originated (retail and wholesale), in all channels
    (the numerator) divided by the Mortgage Bankers Association
    (MBA) October 17, 2007 Mortgage Finance
    Long-Term Forecast estimate of the overall mortgage market (the
    denominator). Our market share calculation is consistent with
    that of our mortgage banking peers. It is important to note that
    these industry calculations cause purchased mortgages to be
    counted more than once, i.e., first when they are originated and
    again by the purchasers (through correspondent and conduit
    channels) of the mortgages. Therefore, our market share
    calculation may not be mathematically precise, but it is
    consistent with industry calculations, which provide investors
    with a good view of our relative standing compared to the other
    top mortgage lending peers.(4)
    
    SFR mortgage loans serviced for others represent the unpaid
    principal balance on loans sold with servicing retained by
    Indymac. Total SFR mortgage loans serviced include mortgage
    loans serviced for others and mortgage loans owned by and
    serviced for Indymac.(5)
    
    Net earnings (loss) for the period divided by weighted average
    basic shares outstanding for the period.(6)
    
    Net earnings (loss) for the period divided by weighted average
    dilutive shares outstanding for the period.(7)
    
    Dividend payout ratio represents dividends declared per share as
    a percentage of diluted earnings (loss) per share.(8)
    
    Net interest margin, thrift, represents the combined margin for
    thrift, elimination and other, and corporate overhead.(9)
    
    Mortgage banking revenue margin is calculated using the sum of
    consolidated gain (loss) on sale of loans and the net interest
    income earned on loans held for sale by our mortgage banking
    production divisions divided by total loans sold.(10)
    
    Efficiency ratio is defined as operating expenses divided by net
    revenues, excluding provision for loan losses.(11)
    
    In the debt to equity calculation, debt includes deposits.
    Preferred stock in subsidiary is excluded from the calculation.(12)
    
    The tier 1 core capital ratio and risk-based capital ratio
    are for Indymac Bank and exclude unencumbered cash at the Parent
    Company available for investment in Indymac Bank. The risk-based
    capital ratio is calculated based on the regulatory standard
    risk weightings adjusted for the additional risk weightings for
    subprime loans.(13)
    
    Non-performing assets are non-performing loans plus foreclosed
    assets. Loans are generally placed on non-accrual status when
    they are 90 days past due. 6




---



##### Table of Contents



NARRATIVE
    SUMMARY OF CONSOLIDATED FINANCIAL RESULTS
  Three
    Months ended September 30, 2007 Compared to Three Months
    ended September 30, 2006
    SFR
    Mortgage Loan Production
    Mortgage
    Banking Revenue Margin
     7




---



##### Table of Contents



Other
    Credit Costs
    Mortgage
    Servicing Performance
    Operating
    Expenses
    Other
    Items
    Nine
    Months ended September 30, 2007 Compared to Nine Months
    ended September 30, 2006
     8




---



##### Table of Contents



SUMMARY
    OF BUSINESS SEGMENT RESULTS
       9




---



##### Table of Contents



10




---



##### Table of Contents



Mortgage








TotalBanking


Thrift


Eliminations


Operating


Corporate


TotalSegment


Segment


& Other(1)


Results


Overhead


CompanyThree Months Ended September 30, 2007Operating ResultsNet interest income

$
39,226


$
73,829


$
29,900


$
142,955


$
(777
)

$
142,178Provision for loan losses






(98,279
)






(98,279
)






(98,279
)Gain (loss) on sale of loans


(157,670
)


(35,783
)


(57,666
)


(251,119
)






(251,119
)Service fee income (expense)


183,273



1,571



28,085



212,929







212,929Gain on sale and leaseback of building


















23,982



23,982Gain (loss) on MBS


(3,321
)


(91,617
)


1,269



(93,669
)






(93,669
)Other income (expense)


11,737



8,735



898



21,370



222



21,592Net revenues (expense)


73,245



(141,544
)


2,486



(65,813
)


23,427



(42,386
)Operating expenses


214,516



34,250



17,345



266,111



39,111



305,222Severance charges


















27,634



27,634Deferral of expenses under SFAS 91


(58,379
)


(4,349
)






(62,728
)






(62,728
)Pre-tax earnings (loss)


(82,892
)


(171,445
)


(14,859
)


(269,196
)


(43,318
)


(312,514
)Minority interests


















12,396



12,396Net earnings (loss)

$
(50,512
)

$
(104,411
)

$
(9,017
)

$
(163,940
)

$
(38,777
)

$
(202,717
)Performance DataAverage interest-earning assets

$
14,591,406


$
16,618,394


$
(94,598
)

$
31,115,202


$
579,356


$
31,694,558Allocated capital


1,157,664



914,473



11,335



2,083,472



(29,091
)


2,054,381Loans produced


16,176,966



884,732



N/A



17,061,698







17,061,698Loans sold


13,827,123



826,566



(1,645,142
)


13,008,547







13,008,547MBR margin


(0.77
)%


(4.33
)%


N/A



N/A



N/A



(1.54
)%ROE


(17
)%


(45
)%


N/A



(31
)%


N/A



(39
)%Net interest margin


N/A



1.76
%


N/A



1.82
%


N/A



1.78
%Net interest margin, thrift


N/A



1.76
%


N/A



N/A



N/A



2.37
%Average FTE


7,734



660



339



8,733



1,157



9,890Three Months Ended September 30, 2006Operating ResultsNet interest income

$
37,707


$
79,043


$
22,034


$
138,784


$
(2,073
)

$
136,711Provision for loan losses






(4,988
)






(4,988
)






(4,988
)Gain (loss) on sale of loans


166,663



16,558



(22,996
)


160,225







160,225Service fee income (expense)


29,927



(397
)


(8,472
)


21,058







21,058Gain (loss) on MBS


15,622



1,976



1,370



18,968







18,968Other income (expense)


2,802



10,631



(610
)


12,823



777



13,600Net revenues (expense)


252,721



102,823



(8,674
)


346,870



(1,296
)


345,574Operating expenses


182,026



31,757



12,937



226,720



42,606



269,326Deferral of expenses under SFAS 91


(60,988
)


(4,492
)


(718
)


(66,198
)






(66,198
)Pre-tax earnings (loss)


131,683



75,558



(20,893
)


186,348



(43,902
)


142,446Net earnings (loss)

$
80,041


$
46,016


$
(13,141
)

$
112,916


$
(26,736
)

$
86,180Performance DataAverage interest-earning assets

$
9,798,354


$
15,500,071


$
(93,621
)

$
25,204,804


$
302,213


$
25,507,017Allocated capital


789,277



820,043



1,939



1,611,259



260,120



1,871,379Loans produced


23,167,283



1,271,893







24,439,176







24,439,176Loans sold


21,216,331



1,281,971



(2,990,126
)


19,508,176







19,508,176MBR margin


0.98
%


1.29
%


N/A



N/A



N/A



1.03
%ROE


40
%


22
%


N/A



28



N/A



18
%Net interest margin


N/A



2.02
%


N/A



2.18



N/A



2.13
%Net interest margin, thrift


N/A



2.02
%


N/A



N/A



N/A



2.50
%Average FTE


5,902



657



324



6,883



1,303



8,186Quarter to Quarter Comparison% change in net earnings


(163
)%


(327
)%


31
%


(245
)%


(45
)%


(335
)%% change in capital


47
%


12
%


485
%


29
%


(111
)%


10
%    (1)
    
    Included are eliminations, deposits, and treasury items, the
    details of which are provided on page 31. 11




---



##### Table of Contents



MORTGAGE
    BANKING SEGMENT
             12




---



##### Table of Contents



Consumer


Commercial


TotalMortgage


Mortgage


Mortgage


Mortgage


MortgageProduction


Servicing


Banking


Banking


BankingDivisions


Division


O/H(1)


Division


SegmentThree Months Ended September 30, 2007Operating ResultsNet interest income

$
50,572


$
(12,080
)

$
632


$
102


$
39,124Provision for loan losses


















Gain (loss) on sale of loans


(159,817
)


2,543



(193
)


(203
)


(157,467
)Service fee income (expense)


11,753



171,508



9



3



183,273Gain (loss) on MBS






(3,321
)










(3,321
)Other income (expense)


7,014



3,778



755



190



11,737Net revenues (expense)


(90,478
)


162,428



1,203



92



73,245Operating expenses


167,064



25,824



18,954



2,674



214,516Deferral of expenses under SFAS 91


(54,672
)


(3,421
)






(286
)


(58,379
)Pre-tax earnings (loss)


(202,870
)


140,025



(17,751
)


(2,296
)


(82,892
)Net earnings (loss)

$
(123,579
)

$
85,275


$
(10,810
)

$
(1,398
)

$
(50,512
)Performance DataAverage interest-earning assets

$
13,040,013


$
1,484,197


$
2,109


$
65,087


$
14,591,406Allocated capital


735,561



399,237



17,315



5,551



1,157,664Loans produced


15,000,286



1,051,464



N/A



125,216



16,176,966Loans sold


13,112,054



674,074



N/A



40,995



13,827,123MBR margin


(0.83
)%


0.38
%


N/A



N/A



(0.77
)%ROE


(67
)%


85
%


N/A



(100
)%


(17
)%Net interest margin


1.54
%


N/A



N/A



0.62
%


N/AAverage FTE


5,839



296



1,549



50



7,734Three Months Ended September 30, 2006Operating ResultsNet interest income

$
41,218


$
(3,323
)

$
(188
)

$



$
37,707Provision for loan losses


















Gain (loss) on sale of loans


157,271



9,392











166,663Service fee income (expense)


5,599



24,328











29,927Gain (loss) on MBS






15,622











15,622Other income (expense)


303



1,653



846







2,802Net revenues (expense)


204,391



47,672



658







252,721Operating expenses


149,728



16,868



15,367



63



182,026Deferral of expenses under SFAS 91


(58,860
)


(2,128
)










(60,988
)Pre-tax earnings (loss)


113,523



32,932



(14,709
)


(63
)


131,683Net earnings (loss)

$
68,981


$
20,056


$
(8,958
)

$
(38
)

$
80,041Performance DataAverage interest-earning assets

$
9,152,748


$
645,565


$
41


$



$
9,798,354Allocated capital


509,136



269,464



10,677







789,277Loans produced


22,446,264



721,019











23,167,283Loans sold


20,562,308



654,023











21,216,331MBR margin


0.97
%


1.44
%


N/A



N/A



0.98
%ROE


54
%


30
%


N/A



N/A



40
%Net interest margin


1.79
%


N/A



N/A



N/A



N/AAverage FTE


4,652



175



1,074



1



5,902Quarter to Quarter Comparison% change in net earnings


(279
)%


325
%


(21
)%


N/A



(163
)%% change in equity


44
%


48
%


62
%


N/A



47
%    (1)
    
    Included production division overhead, servicing overhead and
    secondary marketing overhead of $4.2 million,
    $3.7 million and $2.9 million, respectively, for the
    third quarter of 2007. For the third quarter of 2006, the
    production division overhead, servicing overhead and secondary
    marketing overhead were $3.8 million, $2.7 million and
    $2.5 million, respectively. 13




---



##### Table of Contents



MORTGAGE
    PRODUCTION DIVISIONS
      ®
   14




---



##### Table of Contents



Mortgage Professionals Group DivisionTotal Mortgage





TotalConsumer














Professionals


Financial


MortgageDirect


Retail


Wholesale


Correspondent


Conduit


Group


Freedom


ProductionDivision


Channel


Channel


Channel


Channel


Division


Division


DivisionsThree Months Ended September 30, 2007Operating ResultsNet interest income

$
291


$
1,508


$
26,008


$
5,666


$
12,455


$
45,637


$
4,644


$
50,572Provision for loan losses






























Gain (loss) on sale of loans


2,125



(568
)


(53,466
)


(23,261
)


(98,961
)


(176,256
)


14,314



(159,817
)Service fee income (expense)


























11,753



11,753Gain (loss) on MBS






























Other income (expense)


173



1,654



5,240







(64
)


6,830



11



7,014Net revenues (expense)


2,589



2,594



(22,218
)


(17,595
)


(86,570
)


(123,789
)


30,722



(90,478
)Operating expenses


5,369



31,448



78,111



9,672



10,235



129,466



32,229



167,064Deferral of expenses under SFAS 91


(2,514
)


(12,223
)


(29,689
)


(4,032
)






(45,944
)


(6,214
)


(54,672
)Pre-tax earnings (loss)


(266
)


(16,631
)


(70,640
)


(23,235
)


(96,805
)


(207,311
)


4,707



(202,870
)Net earnings (loss)

$
(163
)

$
(10,128
)

$
(43,020
)

$
(14,150
)

$
(58,954
)

$
(126,252
)

$
2,836


$
(123,579
)Performance DataAverage interest-earning assets

$
118,896


$
205,379


$
5,601,759


$
1,257,571


$
4,893,561


$
11,958,270


$
962,847


$
13,040,013Allocated capital


6,053



17,939



275,232



64,199



236,397



593,767



135,741



735,561Loans produced


263,259



546,260



8,828,707



1,891,435



2,391,033



13,657,435



1,079,592



15,000,286Loans sold


238,189



400,705



7,770,432



1,722,851



2,862,416



12,756,404



117,461



13,112,054MBR margin


1.01
%


0.23
%


(0.35
)%


(1.02
)%


(3.02
)%


(1.02
)%


16.14
%


(0.83
)%ROE


(11
)%


(224
)%


(62
)%


(87
)%


(99
)%


(84
)%


8
%


(67
)%Net interest margin


0.97
%


2.91
%


1.84
%


1.79
%


1.01
%


1.51
%


1.91
%


1.54
%Average FTE


280



1,282



2,571



232



132



4,217



1,342



5,839Three Months Ended September 30, 2006Operating ResultsNet interest income

$
504


$
3


$
15,939


$
3,577


$
18,327


$
37,846


$
2,868


$
41,218Provision for loan losses






























Gain (loss) on sale of loans


5,957



48



79,916



7,897



17,905



105,766



45,548



157,271Service fee income (expense)


























5,599



5,599Gain (loss) on MBS






























Other income (expense)


240



29











(153
)


(124
)


187



303Net revenues (expense)


6,701



80



95,855



11,474



36,079



143,488



54,202



204,391Operating expenses


10,961



868



83,575



11,962



7,557



103,962



34,805



149,728Deferral of expenses under SFAS 91


(5,197
)


(22
)


(40,282
)


(5,767
)






(46,071
)


(7,592
)


(58,860
)Pre-tax earnings (loss)


937



(766
)


52,562



5,279



28,522



85,597



26,989



113,523Net earnings (loss)

$
570


$
(466
)

$
32,010


$
3,215


$
17,370


$
52,129


$
16,282


$
68,981Performance DataAverage interest-earning assets

$
174,893


$
1,339


$
3,734,539


$
830,710


$
3,609,638


$
8,176,226


$
801,629


$
9,152,748Allocated capital


8,755



67



192,689



42,780



149,894



385,430



114,951



509,136Loans produced


447,753



7,890



9,280,817



2,503,012



9,078,589



20,870,308



1,128,203



22,446,264Loans sold


448,113



5,947



9,050,759



2,385,091



7,600,746



19,042,543



1,071,652



20,562,308MBR margin


1.44
%


0.86
%


1.06
%


0.48
%


0.48
%


0.75
%


4.52
%


0.97
%ROE


26
%


N/M



66
%


30
%


46
%


54
%


56
%


54
%Net interest margin


1.14
%


0.89
%


1.69
%


1.71
%


2.01
%


1.84
%


1.42
%


1.79
%Average FTE


362



25



2,507



246



147



2,925



1,365



4,652Quarter to Quarter Comparison% change in net earnings


(129
)%


N/M



(234
)%


N/M



(439
)%


(342
)%


(83
)%


(279
)%% change in capital


(31
)%


N/M



43
%


50
%


58
%


54
%


18
%


44
%    (1)
    
    MBR margin is calculated using the sum of consolidated gain
    (loss) on sale of loans and the net interest income earned on
    HFS loans by our mortgage banking production divisions divided
    to total loans sold. The gain (loss) on sale of loans includes
    fair value adjustments on HFS loans in our portfolio at the end
    of the period that are not included in the amount of total loans
    sold. 15




---



##### Table of Contents



Three Months EndedSeptember 30,


September 30,


Percent


June 30,


Percent2007


2006


Change


2007


ChangeKey Production Drivers:Active customers(1)


9,223



7,686



20
%


9,187



Sales personnel


1,235



992



24
%


1,241



Number of regional offices


16



16







16



    (1)
    
    Active customers are defined as customers who funded at least
    one loan during the most recent
    90-day
    period.  Loan
    Production
       16




---



##### Table of Contents



Three Months Ended


Nine Months EndedSeptember 30,


September 30,


Percent


June 30,


Percent


September 30,


September 30,


Percent2007


2006


Change


2007


Change


2007


2006


ChangeProduction by Division and Channel:SFR mortgage loan production:Mortgage professionals group division:Wholesale channel(1)

$
8,829


$
9,281



(5
)%

$
10,238



(14
)%

$
29,699


$
26,887



10
%Correspondent channel


1,891



2,503



(24
)%


2,649



(29
)%


7,564



7,307



4
%Conduit channel


2,391



9,078



(74
)%


5,281



(55
)%


16,040



20,685



(22
)%Retail channel


546







N/A



376



45
%


971







N/AConsumer direct division


263



456



(42
)%


289



(9
)%


872



1,533



(43
)%Financial Freedom division


1,080



1,128



(4
)%


1,258



(14
)%


3,559



3,583



(1
)%Servicing retention channel


1,052



721



46
%


1,490



(29
)%


3,660



1,688



117
%Home equity division(2)


4



30



(87
)%


7



(43
)%


36



93



(61
)%Consumer construction division(2)


760



771



(1
)%


917



(17
)%


2,489



2,229



12
%Total SFR mortgage loan production


16,816



23,968



(30
)%


22,505



(25
)%


64,890



64,005



1
%Commercial loan production:Commercial mortgage banking division


125







N/A



45



178
%


171







N/AHomebuilder division(2)


121



471



(74
)%


473



(74
)%


954



1,365



(30
)%Total loan production

$
17,062


$
24,439



(30
)%

$
23,023



(26
)%

$
66,015


$
65,370



1
%Total pipeline of SFR mortgage loans in process at period
    end

$
7,421


$
14,556



(49
)%

$
13,376



(45
)%     (1)
    
    Wholesale channel includes $1.4 billion, $898 million,
    and $1.4 billion of production from wholesale inside sales
    for the quarters ended September 30, 2007 and 2006 and
    June 30, 2007, respectively, and $4.1 billion, and
    $2.2 billion of production from wholesale inside sales for
    the nine months ended September 30, 2007 and 2006,
    respectively. The wholesale inside sales force focuses on small
    and geographically remote mortgage brokers through centralized
    in-house sales personnel instead of field sales personnel.(2)
    
    The amounts of home equity lines of credit (HELOCs),
    consumer construction loans and builder construction loans
    originated by these channels represent commitments. 17




---



##### Table of Contents



Three Months Ended


Nine Months EndedSeptember 30,


September 30,


Percent


June 30,


Percent


September 30,


September 30,


Percent2007


2006


Change


2007


Change


2007


2006


ChangeProduction by Product Type:Standard first mortgage products:Prime

$
13,632


$
19,363



(30
)%

$
18,536



(26
)%

$
52,887


$
50,425



5
%Subprime


596



729



(18
)%


751



(21
)%


2,431



1,788



36
%Total standard first mortgage products (S&P evaluated)


14,228



20,092



(29
)%


19,287



(26
)%


55,318



52,213



6
%Specialty consumer home mortgage products:HELOCs(1)/Seconds


637



1,840



(65
)%


876



(27
)%


3,216



5,343



(40
)%Reverse mortgages


1,080



1,128



(4
)%


1,258



(14
)%


3,559



3,583



(1
)%Consumer construction(1)


871



908



(4
)%


1,084



(20
)%


2,797



2,866



(2
)%Subtotal SFR mortgage production


16,816



23,968



(30
)%


22,505



(25
)%


64,890



64,005



1
%Commercial loan products:Commercial real estate


125







N/A



45



178
%


171







N/ABuilder construction commitments(1)


121



471



(74
)%


473



(74
)%


954



1,365



(30
)%Total production

$
17,062


$
24,439



(30
)%

$
23,023



(26
)%

$
66,015


$
65,370



1
%Total S&P lifetime loss estimate(2)


0.49
%


0.87
%






0.63
%






0.68
%


0.81
%     (1)
    
    Amounts represent total commitments.(2)
    
    While our production is evaluated using the Standard &
    Poors (S&P) Levels model, the data are
    not audited or endorsed by S&P. S&P evaluated
    production excludes second liens, HELOCs, reverse mortgages, and
    construction loans.   18




---



##### Table of Contents



Loan
    Sale and Distribution
    Three Months Ended


Nine Months EndedSeptember 30,


September 30,


June 30,


September 30,


September 30,2007


2006


2007


2007


2006Distribution of Loans by Channel:Sales of GSE equivalent loans


64
%


16
%


40
%


41
%


18
%Private-label securitizations


31
%


38
%


46
%


36
%


40
%Whole loan sales, servicing retained






38
%


13
%


20
%


36
%Whole loan sales, servicing released


1
%


1
%






1
%


2
%Subtotal sales


96
%


93
%


99
%


98
%


96
%Investment portfolio acquisitions


4
%


7
%


1
%


2
%


4
%Total loan distribution percentage


100
%


100
%


100
%


100
%


100
%Total loan distribution

$
13,478


$
20,914


$
20,378


$
58,789


$
57,870        19




---



##### Table of Contents



Three Months Ended


Nine Months EndedSeptember 30,


September 30,


Percent


June 30,


Percent


September 30,


September 30,


Percent2007


2006


Change


2007


Change


2007


2006


ChangeTotal loans sold

$
13,009


$
19,508



(33
)%

$
20,194



(36
)%

$
57,739


$
55,632



4
%MBR margin after production hedging


0.48
%


1.32
%


(64
)%


1.31
%


(63
)%


1.04
%


1.47
%


(29
)%MBR margin after credit costs


(1.26
)%


1.24
%


(202
)%


1.01
%


(225
)%


0.44
%


1.35
%


(67
)%Net MBR margin


(1.54
)%


1.03
%


(250
)%


0.80
%


(293
)%


0.22
%


1.12
%


(80
)%     MORTGAGE
    SERVICING DIVISION
           20




---



##### Table of Contents



Mortgage





TotalServicing


Servicing


MortgageRights


Retention


ServicingChannel


Channel


DivisionThree Months Ended September 30, 2007Operating ResultsNet interest income (expense)

$
(15,042
)

$
2,962


$
(12,080
)Provision for loan losses










Gain (loss) on sale of loans


279



2,264



2,543Service fee income (expense)


171,508







171,508Gain (loss) on MBS


(3,321
)






(3,321
)Other income (expense)


2,274



1,504



3,778Net revenues (expense)


155,698



6,730



162,428Operating expenses


11,874



13,950



25,824Deferral of expenses under SFAS 91






(3,421
)


(3,421
)Pre-tax earnings (loss)


143,824



(3,799
)


140,025Net earnings (loss)

$
87,589


$
(2,314
)

$
85,275Performance DataAverage interest-earning assets

$
600,337


$
883,860


$
1,484,197Allocated capital


358,217



41,020



399,237Loans produced






1,051,464



1,051,464Loans sold






674,074



674,074MBR margin


N/A



0.34
%


0.38
%ROE


97
%


(22
)%


85
%Net interest margin


N/A



1.33
%


N/AAverage FTE


89



207



296Three Months Ended September 30, 2006Operating ResultsNet interest income (expense)

$
(4,600
)

$
1,277


$
(3,323
)Provision for loan losses










Gain (loss) on sale of loans


1,575



7,817



9,392Service fee income (expense)


24,328







24,328Gain (loss) on MBS


15,622







15,622Other income (expense)


309



1,344



1,653Net revenues (expense)


37,234



10,438



47,672Operating expenses


8,605



8,263



16,868Deferral of expenses under SFAS 91






(2,128
)


(2,128
)Pre-tax earnings (loss)


28,629



4,303



32,932Net earnings (loss)

$
17,435


$
2,621


$
20,056Performance DataAverage interest-earning assets

$
273,277


$
372,288


$
645,565Allocated capital


252,148



17,316



269,464Loans produced






721,019



721,019Loans sold


19,249



634,774



654,023MBR margin


N/A



1.23
%


1.44
%ROE


27
%


60
%


30
%Net interest margin


N/A



N/A



N/AAverage FTE


93



82



175Quarter to Quarter Comparison% change in net earnings


402
%


(188
)%


325
%% change in capital


42
%


137
%


48
%    21




---



##### Table of Contents



Three Months Ended


Nine Months EndedSeptember 30,


September 30,


June 30,


September 30,


September 30,2007


2006


2007


2007


2006Unpaid principal balance of loans serviced at beginning of period

$
167,710


$
109,989


$
156,144


$
139,817


$
84,495Additions


13,377



20,709



20,580



58,647



56,822Clean-up
    calls exercised










(153
)


(153
)


(31
)Loan payments and prepayments


(7,172
)


(6,303
)


(8,861
)


(24,396
)


(16,891
)Unpaid principal balance of loans serviced at end of period

$
173,915


$
124,395


$
167,710


$
173,915


$
124,395     September 30,


September 30,


June 30,2007


2006


2007By Product Type:Fixed-rate mortgages


37
%


34
%


36
%Intermediate term fixed-rate loans


35
%


29
%


34
%Pay option adjustable-rate mortgages (ARMs)


16
%


25
%


18
%Reverse mortgages (all ARMs)


9
%


9
%


9
%HELOCs


2
%


2
%


2
%Other


1
%


1
%


1
%Total


100
%


100
%


100
%Additional Information(1):Weighted average FICO(2)


705



703



704Weighted average original loan-to-value (LTV)
    ratio(3)


73
%


73
%


72
%Average original loan size (in thousands)


243



228



239Percent of portfolio with prepayment penalty


37
%


42
%


39
%Portfolio delinquency (% of unpaid principal balance)(4)


6.77
%


4.02
%


5.23
%By Geographic Distribution:California


43
%


42
%


43
%Florida


8
%


8
%


8
%New York


8
%


8
%


8
%New Jersey


4
%


4
%


4
%Virginia


4
%


4
%


4
%Other


33
%


34
%


33
%Total


100
%


100
%


100
%     (1)
    
    Portfolio delinquency is calculated for the entire servicing
    portfolio. All other information presented excludes reverse
    mortgages.(2)
    
    FICO scores are the result of a credit scoring system developed
    by Fair Isaacs and Co. and are generally used by lenders to
    evaluate a borrowers credit history. FICO scores of 700 or
    higher are generally considered in the mortgage industry to be
    very high quality borrowers with low risk of default, but in
    general, the secondary market will consider FICO scores of 620
    or higher to be prime.(3)
    
    Combined loan-to-value (CLTV) ratio for loans in the
    second lien position is used to calculate weighted average
    original LTV ratio for the portfolio.(4)
    
    Delinquency is defined as 30 days or more past the due date
    excluding loans in foreclosure. 22




---



##### Table of Contents



THRIFT
    SEGMENT
     23




---



##### Table of Contents



Non-Investment


TotalInvestment


Grade and


Mortgage-


SFRGrade


Residual


Backed


Mortgage


Home


Consumer





Warehouse


Discontinued


TotalSecurities


Securities


Securities


Loans HFI


Equity


Construction


Homebuilder


Lending


Products


ThriftChannel


Channel


Division


Division


Division


Division


Division


Division


Division


SegmentThree Months Ended
    September 30, 2007Operating ResultsNet interest income

$
8,576


$
16,560


$
25,136


$
10,948


$
9,021


$
14,228


$
12,754


$
1,321


$
421


$
73,829Provision for loan losses














(12,000
)


(800
)


(6,750
)


(78,191
)


(88
)


(450
)


(98,279
)Gain (loss) on sale of loans














(5,784
)


(37,051
)


7,052















(35,783
)Service fee income (expense)


















1,571



















1,571Gain (loss) on MBS


(19,213
)


(67,231
)


(86,444
)






(4,870
)


(303
)














(91,617
)Other income (expense)














543



1,606



6,415



(204
)


375







8,735Net revenues (expense)


(10,637
)


(50,671
)


(61,308
)


(6,293
)


(30,523
)


20,642



(65,641
)


1,608



(29
)


(141,544
)Operating expenses


59



842



901



4,649



3,490



18,755



5,410



980



65



34,250Deferral of expenses under SFAS 91


















(43
)


(2,862
)


(1,444
)










(4,349
)Pre-tax earnings (loss)


(10,696
)


(51,513
)


(62,209
)


(10,942
)


(33,970
)


4,749



(69,607
)


628



(94
)


(171,445
)Net earnings (loss)

$
(6,514
)

$
(31,371
)

$
(37,885
)

$
(6,664
)

$
(20,688
)

$
2,892


$
(42,391
)

$
382


$
(57
)

$
(104,411
)Performance DataAverage interest-earning assets

$
4,602,711


$
403,030


$
5,005,741


$
5,455,887


$
1,706,154


$
2,963,940


$
1,264,835


$
190,996


$
30,841


$
16,618,394Allocated capital


88,247



229,011



317,258



199,024



124,106



151,704



104,399



15,211



2,771



914,473Loans produced


















3,726



759,900



121,106











884,732Loans sold














329,996



82,596



413,974















826,566ROE


(29
)%


(54
)%


(47
)%


(13
)%


(66
)%


8
%


(161
)%


10
%


(8
)%


(45
)%Net interest margin, thrift.


0.74
%


16.30
%


1.99
%


0.80
%


2.10
%


1.90
%


4.00
%


2.74
%


5.42
%


1.76
%Efficiency ratio


(1
)%


(2
)%


(1
)%


81
%


(12
)%


58
%


32
%


58
%


15
%


(69
)%Average FTE


2



9



11



11



75



405



128



30







660Three Months Ended
    September 30, 2006Operating ResultsNet interest income

$
8,274


$
11,002


$
19,276


$
20,430


$
10,851


$
10,454


$
16,488


$
1,035


$
509


$
79,043Provision for loan losses














(2,000
)






(720
)


(2,200
)


(18
)


(50
)


(4,988
)Gain (loss) on sale of loans














748



5,788



10,022















16,558Service fee income (expense)


















(397
)


















(397
)Gain (loss) on MBS


(361
)


5,991



5,630







(3,607
)


(47
)














1,976Other income (expense)


(14
)






(14
)


429



2,392



6,655



703



466







10,631Net revenues (expense)


7,899



16,993



24,892



19,607



15,027



26,364



14,991



1,483



459



102,823Operating expenses


315



658



973



1,365



5,607



17,690



4,911



1,134



77



31,757Deferral of expenses under SFAS 91


















(361
)


(2,321
)


(1,810
)










(4,492
)Pre-tax earnings (loss)


7,584



16,335



23,919



18,242



9,781



10,995



11,890



349



382



75,558Net earnings (loss)

$
4,619


$
9,948


$
14,567


$
11,109


$
5,957


$
6,696


$
7,241


$
213


$
233


$
46,016Performance DataAverage interest-earning assets

$
3,603,050


$
242,911


$
3,845,961


$
5,851,294


$
1,947,724


$
2,568,007


$
1,112,338


$
135,511


$
39,236


$
15,500,071Allocated capital


70,215



123,494



193,709



220,811



151,013



130,975



108,408



11,583



3,544



820,043Loans produced


















29,806



770,937



471,150











1,271,893Loans sold


















635,366



646,605















1,281,971ROE


26
%


32
%


30
%


20
%


16
%


20
%


26
%


7
%


26
%


22
%Net interest margin, thrift.


0.91
%


17.97
%


1.99
%


1.39
%


2.21
%


1.62
%


5.88
%


3.03
%


5.15
%


2.02
%Efficiency ratio


4
%


4
%


4
%


6
%


35
%


57
%


18
%


76
%


15
%


25
%Average FTE


6



7



13



14



76



416



111



27







657Quarter to Quarter Comparison% change in net earnings


(241
)%


(415
)%


(360
)%


(160
)%


(447
)%


(57
)%


N/M



79
%


(124
)%


(327
)%% change in capital


26
%


85
%


64
%


(10
)%


(18
)%


16
%


(4
)%


31
%


(22
)%


12
%  24




---



##### Table of Contents



MORTGAGE-BACKED
    SECURITIES DIVISION
    September 30, 2007


September 30, 2006


December 31, 2006Trading


AFS


Total


Trading


AFS


Total


Trading


AFS


TotalMortgage Banking Segment:AAA-rated agency securities

$
350,694


$



$
350,694


$



$



$



$



$
2,915


$
2,915AAA-rated and agency interest-only securities


71,901







71,901



64,083







64,083



66,581







66,581AAA-rated principal-only securities


72,488







72,488



35,158







35,158



38,478







38,478Prepayment penalty and other securities


83,205







83,205



92,326







92,326



93,176







93,176Total Mortgage Banking


578,288







578,288



191,567







191,567



198,235



2,915



201,150Thrift segment:AAA-rated non-agency securities


152,773



3,762,877



3,915,650



33,829



4,130,995



4,164,824



43,957



4,604,489



4,648,446AAA-rated agency securities


45,414



47,408



92,822







50,084



50,084







62,260



62,260AAA-rated and agency interest-only securities














4,357







4,357



6,989







6,989Prepayment penalty and other securities


5,034







5,034



6,096







6,096



4,400







4,400Other investment grade securities


255,390



468,766



724,156



29,906



163,289



193,195



29,015



160,238



189,253Other non-investment grade securities


152,340



37,939



190,279



38,999



39,279



78,278



41,390



38,784



80,174Non-investment grade residual securities


218,405



7,410



225,815



222,825



38,833



261,658



218,745



31,828



250,573Total thrift


829,356



4,324,400



5,153,756



336,012



4,422,480



4,758,492



344,496



4,897,599



5,242,095Total mortgage-backed securities

$
1,407,644


$
4,324,400


$
5,732,044


$
527,579


$
4,422,480


$
4,950,059


$
542,731


$
4,900,514


$
5,443,245     SFR
    MORTGAGE LOANS HFI DIVISION
     25




---



##### Table of Contents



September 30,


September 30,


December 31,2007


2006


2006Outstanding balance (book value)

$
4,913,471


$
6,462,610


$
6,519,340Average loan size


344



304



310Non-performing loans


3.64
%


0.90
%


1.09
%Estimated average life in years(1)


3.5



2.4



2.6Estimated average net duration in month(2)


2.2



(1.0
)


(3.5
)Annualized yield


6.32
%


6.00
%


6.01
%Percent of loans with active prepayment penalty


34
%


34
%


34
%Fixed-rate mortgages


6
%


5
%


5
%Intermediate term fixed-rate loans


16
%


14
%


15
%Interest-only loans


54
%


61
%


60
%Pay option ARMs


22
%


18
%


18
%Other


2
%


2
%


2
%Additional Information:Average FICO score


712



716



716Original average LTV ratio


73
%


73
%


73
%Current average LTV ratio(3)


70
%


59
%


61
%Geographic distribution of top five states:Southern California


33
%


32
%


32
%Northern California


22
%


20
%


20
%Total California


55
%


52
%


52
%Florida


6
%


6
%


6
%New York


5
%


4
%


4
%Virginia


3
%


3
%


3
%Arizona


3
%


3
%


3
%Other


28
%


32
%


32
%Total


100
%


100
%


100
%     (1)
    
    Represents the estimated length of time, on average, the SFR
    loan portfolio will remain outstanding based on our estimates
    for prepayments.(2)
    
    Average net duration measures the expected change in the value
    of a financial instrument in response to changes in interest
    rates, taking into consideration the impact of the related
    hedges. The negative net duration implies an increase in value
    as rates rise while the positive net duration implies a decrease
    in value.(3)
    
    Current average LTV ratio is estimated based on the Office of
    Federal Housing Enterprise Oversight House Price Index
    Metropolitan Statistical Area data for the second quarter of
    2007 on a loan level basis.  HOME
    EQUITY DIVISION
     26




---



##### Table of Contents



September 30,


September 30,


December 31,2007


2006


2006Outstanding balance (book value)

$
1,509,125


$
765,760


$
656,714Total commitments(1)


3,149,353



2,115,407



2,211,298Average spread over prime


1.23
%


1.17
%


1.39
%Average FICO score


729



736



737Average CLTV ratio(2)


77
%


77
%


77
%   Additional
    Information on HELOC Portfolio
  Average Loan





Current


30+ DaysSeptember 30, 2007

Outstanding


Commitment


Average Spread


Average


DelinquencyCLTV Ratio

Balance


Balance


Over Prime


FICO


Percentage(3)96% to 100%

$
90,729


$
87



2.45
%


698



5.59
%91% to 95%


285,029



92



1.77
%


716



2.70
%81% to 90%


521,551



81



1.64
%


711



2.29
%71% to 80%


340,373



138



0.52
%


737



1.50
%70% or less


271,443



143



0.37
%


747



0.92
%Total

$
1,509,125



109



1.23
%


729



2.14
%September 30, 2006CLTV Ratio96% to 100%

$
80,904


$
116



2.05
%


731



3.03
%91% to 95%


99,220



99



2.10
%


713



0.62
%81% to 90%


304,942



92



1.48
%


718



0.92
%71% to 80%


161,165



165



0.35
%


745



0.50
%70% or less


119,529



158



0.15
%


752



0.83
%Total

$
765,760



126



1.17
%


736



1.00
%     (1)
    
    On funded loans.(2)
    
    The CLTV ratio combines the LTV on both the first mortgage loan
    and the HELOC.(3)
    
    30+ days delinquency include loans that are 30 days or more
    past the due date including loans in foreclosure.  CONSUMER
    CONSTRUCTION DIVISION
     27




---



##### Table of Contents



September 30,


September 30,


December 31,2007


2006


2006Outstanding balance (book value)

$
2,658,292


$
2,271,995


$
2,276,133Total commitments


4,044,659



3,694,295



3,600,454Average loan commitment


478



477



474Non-performing loans


2.02
%


0.82
%


1.14
%Fixed-rate loans


39
%


80
%


71
%Adjustable-rate loans


61
%


20
%


29
%Additional Information:Average LTV ratio(1)


74
%


73
%


73
%Average FICO score


721



713



718Geographic distribution of top five states:Southern California


29
%


28
%


28
%Northern California


13
%


15
%


15
%Total California


42
%


43
%


43
%Florida


7
%


9
%


9
%Washington


4
%


4
%


4
%New York


4
%


4
%


4
%Arizona


4
%


3
%


3
%Other


39
%


37
%


37
%Total


100
%


100
%


100
%     (1)
    
    The average LTV ratio is based on the estimated appraised value
    of the completed project compared to the commitment amount at
    the date indicated.  HOMEBUILDER
    DIVISION
   28




---



##### Table of Contents




    Land acquisition and development loans: This category of
    55 loans totals $372 million in outstanding balances,
    of which three loans totaling $21 million are non-accrual
    and an additional seven loans at $86 million were
    considered classified.
    Land acquisition, development and construction loans: This
    category of 179 loans totals $803 million in
    outstanding balances, of which 6 loans totaling $85 million
    are non-accrual and an additional 20 loans at
    $138 million were considered classified assets at
    quarter-end.   29




---



##### Table of Contents



September 30,


September 30,


December 31,2007


2006


2006Outstanding balance (book value)

$
1,175,473


$
1,124,330


$
1,144,835Total commitments


1,783,395



2,093,345



2,010,727Average loan commitments


8,574



11,135



10,810Percentage of homes under construction or completed that are sold


34
%


41
%


37
%Median sales price of homes


413



403



420Non-performing loans


9.03
%


0.00
%


0.78
%Allowance for loan losses as a percentage of book value


8.48
%


1.72
%


1.79
%Additional Information:Average LTV ratio(1)


76
%


73
%


73
%Geographic distribution of top five states:Southern California


37
%


38
%


41
%Northern California


29
%


19
%


19
%Total California


66
%


57
%


60
%Florida


11
%


12
%


11
%Illinois


6
%


10
%


9
%Oregon


4
%


6
%


6
%Arizona


3
%


5
%


4
%Other


10
%


10
%


10
%Total


100
%


100
%


100
%     (1)
    
    The average LTV ratio is based on the estimated appraised value
    of the completed project compared to the commitment amount at
    the date indicated.  ELIMINATIONS &
    OTHER SEGMENT
     30




---



##### Table of Contents



EliminationsInterdivisionInterdivision


HedgeDeposits


Treasury


Loan Sales(1)


Transactions


Other


Total(Dollars in thousands)Three Months Ended September 30, 2007Operating ResultsNet interest income

$



$
13,015


$
10,422


$



$
6,463


$
29,900Provision for loan losses






















Gain (loss) on sale of loans










(17,124
)


(43,884
)


3,342



(57,666
)Service fee income (expense)














43,884



(15,799
)


28,085Gain (loss) on MBS


















1,269



1,269Other income (expense)


1,152



237











(491
)


898Net revenues (expense)


1,152



13,252



(6,702
)






(5,216
)


2,486Operating expenses


7,314



15,247











(5,216
)


17,345Deferral of expenses under SFAS 91






















Pre-tax earnings (loss)


(6,162
)


(1,995
)


(6,702
)










(14,859
)Net earnings (loss)

$
(3,753
)

$
(1,215
)

$
(4,049
)

$



$



$
(9,017
)Three Months Ended September 30, 2006Operating ResultsNet interest income

$



$
8,912


$
8,290


$



$
4,832


$
22,034Provision for loan losses






















Gain (loss) on sale of loans










(22,996
)










(22,996
)Service fee income (expense)










422







(8,894
)


(8,472
)Gain (loss) on MBS










1,370











1,370Other income (expense)


896



150











(1,656
)


(610
)Net revenues (expense)


896



9,062



(12,914
)






(5,718
)


(8,674
)Operating expenses


7,173



11,121











(5,357
)


12,937Deferral of expenses under SFAS 91


















(718
)


(718
)Pre-tax earnings (loss)


(6,277
)


(2,059
)


(12,914
)






357



(20,893
)Net earnings (loss)

$
(3,823
)

$
(1,254
)

$
(7,865
)

$



$
(199
)

$
(13,141
)     (1)
    
    Includes loans sold of $1.6 billion and $3.0 billion
    for the three months ended September 30, 2007 and 2006,
    respectively. 31




---



##### Table of Contents



CORPORATE
    OVERHEAD SEGMENT
   32




---



##### Table of Contents



CONSOLIDATED RISK MANAGEMENT
    DISCUSSION
      CAMELS
    FRAMEWORK FOR RISK MANAGEMENT
    CAPITAL
      Capital
    Ratios
    Capital RatiosTangible


Tier 1 Core


Tier 1
    Risk-Based


Total
    Risk-BasedSeptember 30, 2007:As reported pre-subprime risk-weighting


7.48
%


7.48
%


11.26
%


12.01
%Adjusted for additional subprime risk weighting


7.48
%


7.48
%


11.06
%


11.79
%Well-capitalized minimum


2.00
%


5.00
%


6.00
%


10.00
%Excess over well-capitalized minimum requirement

$
1,818,528


$
823,114


$
1,018,656


$
360,630    33




---



##### Table of Contents



Capital
    Management and Allocation
   34




---



##### Table of Contents



Total Assets


Core


Risk-Based% of


Avg.


% of








Avg.


% ofAverage


Total


Allocated


Total


Capital/





Allocated


Total


Capital/Three Months Ended September 30, 2007

Assets


Assets


Capital


Capital


Assets


ROE


Capital


Capital


Assets


ROEMortgage Banking:Consumer Direct

$
124,560



0.3
%

$
4,982



0.2
%


4.0
%


(14
)%

$
6,053



0.3
%


4.9
%


(11
)%Retail


227,631



0.6
%


9,105



0.4
%


4.0
%


(445
)%


17,939



0.9
%


7.9
%


(224
)%Wholesale


5,623,117



15.3
%


224,925



10.9
%


4.0
%


(77
)%


275,232



13.4
%


4.9
%


(62
)%Correspondent


1,261,039



3.4
%


50,442



2.5
%


4.0
%


(112
)%


64,199



3.1
%


5.1
%


(87
)%Conduit


4,958,140



13.5
%


198,326



9.7
%


4.0
%


(119
)%


236,397



11.5
%


4.8
%


(99
)%Total Mortgage Professionals Group


12,069,927



32.8
%


482,798



23.5
%


4.0
%


(105
)%


593,767



28.9
%


4.9
%


(84
)%Financial Freedom


1,263,677



3.4
%


146,331



7.1
%


11.6
%


8
%


135,741



6.6
%


10.7
%


8
%Total Production Divisions


13,458,164



36.5
%


634,111



30.8
%


4.7
%


(78
)%


735,561



35.8
%


5.5
%


(67
)%Mortgage Servicing Rights


3,714,352



10.1
%


243,378



11.8
%


6.6
%


141
%


358,217



17.4
%


9.6
%


97
%Servicing/Customer Retention


887,211



2.4
%


35,488



1.7
%


4.0
%


(26
)%


41,020



2.0
%


4.6
%


(22
)%Total Mortgage Servicing


4,601,563



12.5
%


278,866



13.5
%


6.1
%


120
%


399,237



19.4
%


8.7
%


85
%Mortgage Bank Overhead


158,231



0.4
%


6,330



0.3
%


4.0
%


N/A



17,315



0.8
%


10.9
%


N/ATotal Consumer Mortgage Banking


18,217,958



49.4
%


919,307



44.6
%


5.0
%


(22
)%


1,152,113



56.0
%


6.3
%


(17
)%Commercial Mortgage Banking


68,200



0.2
%


2,728



0.1
%


4.0
%


(207
)%


5,551



0.3
%


8.1
%


(100
)%Total Mortgage Banking


18,286,158



49.6
%


922,035



44.7
%


5.0
%


(23
)%


1,157,664



56.3
%


6.3
%


(17
)%Thrift:Investment grade securities


4,628,416



12.6
%


185,137



9.0
%


4.0
%


(12
)%


88,247



4.3
%


1.9
%


(29
)%Non-investment grade and residuals


448,297



1.2
%


17,932



0.9
%


4.0
%


(733
)%


229,011



11.1
%


51.1
%


(54
)%Total Mortgage-Backed Securities


5,076,713



13.8
%


203,069



9.9
%


4.0
%


(76
)%


317,258



15.4
%


6.2
%


(47
)%Consumer lending portfolio Prime SFR mortgage loans


5,483,500



14.9
%


219,340



10.7
%


4.0
%


(12
)%


199,024



9.7
%


3.6
%


(13
)%Home equity division


1,745,687



4.7
%


69,989



3.4
%


4.0
%


(120
)%


124,106



6.0
%


7.1
%


(66
)%Total Consumer Loans


7,229,187



19.6
%


289,329



14.1
%


4.0
%


(38
)%


323,130



15.7
%


4.5
%


(34
)%Consumer construction division


2,976,162



8.1
%


119,046



5.8
%


4.0
%


9
%


151,704



7.4
%


5.1
%


8
%Total Consumer Thrift Activities


10,205,349



27.7
%


408,375



19.9
%


4.0
%


(24
)%


474,834



23.1
%


4.7
%


(20
)%Home builder division


1,249,004



3.4
%


49,960



2.4
%


4.0
%


(340
)%


104,399



5.1
%


8.4
%


(161
)%Warehouse Lending


182,644



0.5
%


7,306



0.4
%


4.0
%


17
%


15,211



0.7
%


8.3
%


10
%Total Commercial Thrift Activities


1,431,648



3.9
%


57,266



2.8
%


4.0
%


(295
)%


119,610



5.8
%


8.4
%


(139
)%Discontinued products


26,574



0.1
%


1,063



0.1
%


4.0
%


(27
)%


2,771



0.1
%


10.4
%


(8
)%Total Thrift Activities


16,740,284



45.5
%


669,773



32.7
%


4.0
%


(63
)%


914,473



44.4
%


5.5
%


(45
)%Consumer Bank  Deposits


59,589



0.2
%


2,384



0.1
%


4.0
%


N/A



11,335



0.6
%


19.0
%


N/ATreasury


















N/A



N/A











N/A



N/AEliminations


















N/A



N/A











N/A



N/ATotal Operating Activities


35,086,031



95.3
%


1,594,192



77.5
%


4.5
%


(42
)%


2,083,472



101.3
%


5.9
%


(31
)%Corporate overhead


1,746,999



4.7
%


460,189



22.5
%


26.3
%


N/A



(29,091
)


(1.3
)%


(1.7
)%


N/ATotal Company

$
36,833,030



100.0
%

$
2,054,381



100.0
%


5.6
%


(39
)%

$
2,054,381



100.0
%


5.6
%


(39
)%  35




---



##### Table of Contents



ASSET
    QUALITY
        ReserveCredit Risk Area

Reserve Type

Balance


Balance


UPBMortgage Banking:Loans held for sale(1)

Market valuation reserve

$
14,022


$
298


$
14,081Repurchase risk(2)

Secondary market reserve


N/A



57



173,915Thrift:Loans held for investment(3)

Allowance for loan losses


8,553



162



8,495Non-investment grade and residual securities(4)

Loss assumption in valuations


416



835



22,770Foreclosed Assets

Reduction in book value due
    to liquidation costs and/or 
    property value deterioration


123



36



159     (1)
    
    Risks include borrowers credit deteriorating and adversely
    impacting loan saleability; further deterioration of credit
    quality of loans previously repurchased for repurchase/warranty
    issues or through called deals; and actual losses exceeding
    losses that are assumed in our valuations. The reserve includes
    credit marks on delinquent loans plus credit related marks on
    performing loans.(2)
    
    Risks include repurchase of impaired loans due to early payment
    default (EPD) or other repurchase and warranty
    violations beyond the amount reserved at time of sale.(3)
    
    Risk includes credit losses exceeding the risk priced for in the
    allowance.(4)
    
    Reserve balance for non-investment grade and residual securities
    represents the expected remaining cumulative losses.  Non-Performing
    Assets
   36




---



##### Table of Contents



September 30,


September 30,


December 31,2007


2006


2006Non-performing loans HFI

$
339,530


$
78,831


$
108,483Non-performing loans HFS


365,794



42,717



54,347Total non-performing loans


705,324



121,548



162,830Foreclosed assets


123,330



18,498



21,638Total non-performing assets

$
828,654


$
140,046


$
184,468Total non-performing assets to total assets


2.46
%


0.51
%


0.63
%       September 30,


September 30,


December 31,2007


2006


2006SFR mortgage loans

$
176,107


$
54,233


$
66,360Consumer construction division


52,901



18,693



25,957Homebuilder division


106,089







8,981Other(1)


4,433



5,905



7,185Total non-performing loans HFI

$
339,530


$
78,831


$
108,483Allowance for loan losses to non-performing loans HFI


48
%


77
%


58
%     (1)
    
    Includes loans from the home equity division, discontinued
    products and the warehouse lending division.    Allowance
    for Loan Losses
   37




---



##### Table of Contents



TotalAllowance


Reserves as afor Loan


Percentage ofBy Division

Book Value


Losses


Book ValueSFR mortgage loans HFI division

$
4,883,392


$
41,265



0.85
%Consumer construction division


2,395,361



13,738



0.57
%Homebuilder division


1,175,473



99,638



8.48
%Other(1)


98,403



7,127



7.24
%Total HFI portfolio at September 30, 2007

$
8,552,629


$
161,768



1.89
%Total HFI portfolio at December 31, 2006

$
10,177,209


$
62,386



0.61
%       Three Months Ended


Nine Months EndedSeptember 30,


September 30,


September 30,


September 30,2007


2006


2007


2006Balance, beginning of period

$
76,856


$
57,912


$
62,386


$
55,168Allowance transferred to loans HFS










(1,988
)


Provision for loan losses


98,279



4,988



126,170



11,040Charge-offs:SFR mortgage loans HFI division


(7,170
)


(600
)


(13,149
)


(1,405
)Consumer construction division


(4,816
)


(754
)


(7,950
)


(2,005
)Other(1)


(1,816
)


(1,274
)


(6,174
)


(3,102
)Total charge-offs


(13,802
)


(2,628
)


(27,273
)


(6,512
)Recoveries:SFR mortgage loans HFI division


181



75



560



313Consumer construction division


15



219



65



231Other(1)


239



469



1,848



795Total recoveries


435



763



2,473



1,339Total charge-offs, net of recoveries


(13,367
)


(1,865
)


(24,800
)


(5,173
)Balance, end of period

$
161,768


$
61,035


$
161,768


$
61,035Annualized charge-offs to average loans HFI


0.62
%


0.08
%


0.36
%


0.08
%     (1)
    
    Includes loans from the home equity, discontinued product and
    warehouse lending divisions.   38




---



##### Table of Contents



Credit
    Discounts
      September 30,


September 30,


December 31,2007


2006


2006Loans HFS before market valuation reserves

$
14,361,177


$
8,368,626


$
9,507,307Market valuation reserves


(338,943
)


(27,704
)


(39,464
)Net loans HFS portfolio

$
14,022,234


$
8,340,922


$
9,467,843Market valuation reserves as a percentage of gross loans HFS


2.36
%


0.33
%


0.42
%Non-performing loans HFS before market valuation reserves

$
487,314


$
63,422


$
78,238Market valuation reserves


(121,520
)


(20,705
)


(23,891
)Net non-performing loans HFS

$
365,794


$
42,717


$
54,347Non-performing loans held for sale as a percentage of net loans
    HFS portfolio


2.61
%


0.51
%


0.57
%     Secondary
    Market Reserve
   39




---



##### Table of Contents



Three Months Ended September 30,


Nine Months Ended September 30,2007


2006


2007


2006Loans sold:GSEs and whole loans

$
8,804


$
11,589


$
36,765


$
32,227Securitization trusts


4,205



7,919



20,974



23,405Total

$
13,009


$
19,508


$
57,739


$
55,632Total repurchases(1)

$
118


$
57


$
562


$
119Repurchases as a percentage of total loans sold during the period


0.91
%


0.29
%


0.97
%


0.21
%     (1)
    
    Amounts exclude repurchases that are administrative in nature
    and generally are re-sold immediately at little or no loss.      Three Months Ended


Nine Months EndedSeptember 30,


September 30,


September 30,


September 30,2007


2006


2007


2006Balance, beginning of period

$
46,614


$
35,402


$
33,932


$
27,638Additions/provisions


32,008



9,374



87,913



24,147Actual losses/mark-to-market


(21,909
)


(14,639
)


(65,773
)


(22,423
)Recoveries on previous claims


404



53



1,045



828Balance, end of period

$
57,117


$
30,190


$
57,117


$
30,190     Credit
    Reserves Embedded in Non-Investment Grade and Residual
    Securities
   40




---



##### Table of Contents



September 30,


September 30,


June 30,2007


2006


2007Non-investment Grade and Residual Securities:Fair market value

$
416


$
340


$
443As a percentage of tier 1 core capital


17
%


17
%


18
%UPB of underlying collateral

$
22,770



11,575


$
21,002Credit reserves embedded in value

$
835



432


$
698Additions to credit reserves

$
228



61


$
126Net charge-off (losses)

$
91



7


$
49Credit reserves/NPAs


56
%


62
%


91
%   MANAGEMENT
  follow-up
    EARNINGS
    LIQUIDITY
     41




---



##### Table of Contents



September 30,


September 30,


December 31,2007


2006


2006Deposits

$
16,774,638


$
10,111,019


$
10,898,006Advances from FHLB


11,094,800



9,332,800



10,412,800Other borrowings:Asset-backed commercial paper


1,504,678



499,244



2,114,508Loans and securities sold under agreements to repurchase






2,874,048



1,405,505HELOC notes payable


243,019



807,932



659,283Trust preferred debentures


441,232



412,516



456,695Other notes payable


752



1,180



1,009Total other borrowings


2,189,681



4,594,920



4,637,000$
30,059,119


$
24,038,739


$
25,947,806   Principal
    Sources of Cash
  Loan
    Sales and Securitizations
      Deposits/Retail
    Bank
  www.indymacbank.com 24-hours
 42




---



##### Table of Contents



Advances
    from the Federal Home Loan Bank
      Other
    Borrowings, Excluding Subordinated Debentures Underlying
    Trust Preferred Securities
    and/or
  P-1 A-1+
  364-day
  Trust Preferred
    Securities and Warrants
   43




---



##### Table of Contents



3-month
  Direct
    Stock Purchase Plan
    Cash
    from Operating Activities
    SENSITIVITY
    TO MARKET RISK
     44




---



##### Table of Contents



Net
    Interest Margin
    Three Months EndedSeptember 30, 2007


September 30, 2006


June 30, 2007Average





Yield/


Average





Yield/


Average





Yield/Balance


Interest


Rate


Balance


Interest


Rate


Balance


Interest


RateAssetsSecurities

$
5,668,118


$
101,901



7.13
%

$
4,889,155


$
86,212



7.00
%

$
5,221,396


$
95,537



7.34
%Loans held for sale


16,019,841



283,882



7.03
%


10,825,266



196,924



7.22
%


16,208,651



289,262



7.16
%Mortgage loans held for investment


5,528,258



88,075



6.32
%


6,079,803



92,005



6.00
%


5,615,519



88,622



6.33
%Builder construction loans


826,952



18,186



8.72
%


773,132



21,191



10.87
%


815,861



20,209



9.94
%Consumer construction loans


2,284,744



45,788



7.95
%


2,085,453



38,292



7.28
%


2,190,732



44,519



8.15
%Investment in Federal Home Loan Bank stock and other


1,366,645



20,019



5.81
%


854,208



12,127



5.63
%


1,202,869



16,328



5.44
%Total interest-earning assets


31,694,558



557,851



6.98
%


25,507,017



446,751



6.95
%


31,255,028



554,477



7.12
%Mortgage servicing assets


2,375,127











1,552,295











2,153,439Other assets


2,763,345











2,080,669











2,428,034Total assets

$
36,833,030










$
29,139,981










$
35,836,501Liabilities and Shareholders EquityInterest-bearing deposits

$
12,943,759



170,540



5.23
%

$
9,208,481



113,758



4.90
%

$
10,761,811



138,618



5.17
%Advances from Federal Home Loan Bank


13,876,996



183,192



5.24
%


9,783,887



115,769



4.69
%


14,059,734



184,175



5.25
%Other borrowings


4,177,567



61,941



5.88
%


5,682,601



80,513



5.62
%


5,737,455



82,440



5.76
%Total interest-bearing liabilities


30,998,322



415,673



5.32
%


24,674,969



310,040



4.99
%


30,559,000



405,233



5.32
%Other liabilities


3,780,327











2,593,633











3,199,927Total liabilities


34,778,649











27,268,602











33,758,927Shareholders equity


2,054,381











1,871,379











2,077,574Total liabilities and shareholders equity

$
36,833,030










$
29,139,981










$
35,836,501Net interest income





$
142,178










$
136,711










$
149,244Net interest spread(1)










1.66
%










1.96
%










1.80
%Net interest margin(2)










1.78
%










2.13
%










1.92
%     (1)
    
    Net interest spread calculated as the yield on total average
    interest-earnings assets less the yield on total average
    interest-bearing liabilities.(2)
    
    Net interest margin calculated as annualized net interest income
    divided by total average interest-earning assets.  45




---



##### Table of Contents



Nine Months EndedSeptember 30, 2007


September 30, 2006Average





Yield


Average





YieldBalance


Interest


Rate


Balance


Interest


RateAssetsSecurities

$
5,423,462


$
289,717



7.14
%

$
4,541,302


$
233,693



6.88
%Loans held for sale


15,562,904



825,301



7.09
%


10,650,644



551,564



6.92
%Mortgage loans held for investment


6,081,216



285,691



6.28
%


6,014,437



260,276



5.79
%Builder construction loans


810,831



58,148



9.59
%


726,227



55,775



10.27
%Consumer construction loans


2,211,740



133,953



8.10
%


1,967,259



102,794



6.99
%Investment in Federal Home Loan Bank stock and other


1,238,677



52,195



5.63
%


834,396



32,706



5.24
%Total interest-earning assets


31,328,830



1,645,005



7.02
%


24,734,265



1,236,808



6.69
%Mortgage servicing assets


2,133,909











1,377,586Other assets


2,546,210











1,695,257Total assets

$
36,008,949










$
27,807,108Liabilities and Shareholders EquityInterest-bearing deposits

$
11,356,004



441,225



5.19
%

$
8,255,056



280,841



4.55
%Advances from Federal Home Loan Bank


13,863,474



541,896



5.23
%


9,839,691



329,846



4.48
%Other borrowings


5,439,668



235,392



5.79
%


5,844,576



232,046



5.31
%Total interest-bearing liabilities


30,659,146



1,218,513



5.31
%


23,939,323



842,733



4.71
%Other liabilities


3,294,773











2,129,600Total liabilities


33,953,919











26,068,923Shareholders equity


2,055,030











1,738,185Total liabilities and shareholders equity

$
36,008,949










$
27,807,108Net interest income





$
426,492










$
394,075Net interest spread










1.71
%










1.98
%Net interest margin










1.82
%










2.13
%    46




---



##### Table of Contents



Increase/(Decrease) Due toVolume(1)


Rate(2)


Mix(3)


Total ChangeThree Months Ended September 30, 2007 vs. 2006 Interest
    income:Securities

$
13,736


$
1,685


$
268


$
15,689Loans held for sale


94,495



(5,093
)


(2,444
)


86,958Mortgage loans held for investment


(8,346
)


4,857



(441
)


(3,930
)Builder construction loans


1,475



(4,189
)


(291
)


(3,005
)Consumer construction loans


3,659



3,502



335



7,496Investment in Federal Home Loan Bank stock and other


7,275



386



231



7,892Total interest income


112,294



1,148



(2,342
)


111,100Interest expense:Interest-bearing deposits


46,144



7,568



3,070



56,782Advances from Federal Home Loan Bank


48,432



13,389



5,602



67,423Other borrowings


(21,324
)


3,743



(991
)


(18,572
)Total interest expense


73,252



24,700



7,681



105,633Net interest income

$
39,042


$
(23,552
)

$
(10,023
)

$
5,467   Increase/(Decrease) Due toVolume(1)


Rate(2)


Mix(3)


Total ChangeNine Months Ended September 30, 2007 vs. 2006 Interest
    income:Securities

$
45,395


$
8,900


$
1,729


$
56,024Loans held for sale


254,391



13,240



6,106



273,737Mortgage loans held for investment


2,890



22,278



247



25,415Builder construction loans


6,498



(3,694
)


(431
)


2,373Consumer construction loans


12,775



16,352



2,032



31,159Investment in Federal Home Loan Bank stock and other


15,847



2,454



1,188



19,489Total interest income


337,796



59,530



10,871



408,197Interest expense:Interest-bearing deposits


105,496



39,900



14,988



160,384Advances from Federal Home Loan Bank


134,885



54,768



22,397



212,050Other borrowings


(16,076
)


20,868



(1,446
)


3,346Total interest expense


224,305



115,536



35,939



375,780Net interest income

$
113,491


$
(56,006
)

$
(25,068
)

$
32,417     (1)
    
    Changes in volume are calculated by taking changes in average
    balances multiplied by the prior periods average interest
    rate.(2)
    
    Changes in the rate are calculated by taking changes in the
    average interest rate multiplied by the prior periods
    average balance.(3)
    
    Changes in rate/volume (mix) are calculated by
    taking changes in rates times the changes in volume. 47




---



##### Table of Contents



Net
    Interest Margin by Segment
    Three Months EndedSeptember 30, 2007


September 30, 2006


June 30, 2007Average


Net


Net


Average


Net


Net


Average


Net


NetEarning


Interest


Interest


Earning


Interest


Interest


Earning


Interest


InterestAssets


Income


Margin


Assets


Income


Margin


Assets


Income


MarginBy Segment:Thrift segment and other

$
17,103


$
103



2.39
%

$
15,709


$
99



2.50
%

$
16,621


$
95



2.29
%Mortgage banking segment


14,592



39



1.06
%


9,798



38



1.53
%


14,634



54



1.49
%Total Company

$
31,695


$
142



1.78
%

$
25,507


$
137



2.13
%

$
31,255


$
149



1.92
%   Nine Months EndedSeptember 30, 2007


September 30, 2006Average


Net


Net


Average


Net


NetEarning


Interest


Interest


Earning


Interest


InterestAssets


Income


Margin


Assets


Income


MarginBy Segment:Thrift segment and other

$
17,029


$
288



2.26
%

$
15,201


$
279



2.45
%Mortgage banking segment


14,300



138



1.29
%


9,533



115



1.62
%Total Company

$
31,329


$
426



1.82
%

$
24,734


$
394



2.13
%     Loans
    Held for Sale and Pipeline Hedging
      Accounting for Derivative Instruments and Hedging
    Activities, Application of Accounting
    Principles to Loan Commitments.
 48




---



##### Table of Contents



Three Months Ended

Nine Months EndedSeptember 30,

September 30,

Percent

June 30,

Percent

September 30,

September 30,

Percent2007

2006

Change

2007

Change

2007

2006

ChangeGross MBR margin


0.75
%


1.16
%


(35
)%


0.91
%


(18
)%


0.96
%


1.52
%


(37
)%MBR margin after hedging(1)


0.48
%


1.32
%


(64
)%


1.31
%


(63
)%


1.04
%


1.47
%


(29
)%     (1)
    
    Before credit costs and SFAS 91 deferred costs.  Hedging
    Interest Rate Risk on Servicing-Related Assets
        Three Months Ended


Nine Months EndedSeptember 30,


September 30,


June 30,


September 30,


September 30,2007


2006


2007


2007


2006Valuation adjustment due to market changes and external
    benchmarking

$
7,421


$
(134,070
)

$
222,659


$
260,920


$
10,794Gain (loss) on financial instruments used to hedge MSRs


123,180



119,024



(213,213
)


(118,781
)


(27,265
)Hedge gain (loss) on AAA-rated and agency interest-only
    securities


8,820



4,667



(14,741
)


(6,356
)


(8,965
)Unrealized gain (loss) on AAA-rated and agency interest-only
    securities


(4,712
)


(8,629
)


10,465



7,235



4,138Unrealized gain (loss) on principal-only securities


(146
)


5,008



(4,916
)


(4,761
)


(1,500
)Unrealized gain (loss) on prepayment penalty securities


(7,666
)


13,250



(21,658
)


(31,528
)


17,907Net gain (loss) on MSRs, AAA-rated and agency interest-only
    securities, and hedges

$
126,897


$
(750
)

$
(21,404
)

$
106,729


$
(4,891
)    49




---



##### Table of Contents



Value-At-Risk
  value-at-risk one-day
      Net
    Portfolio Value
   50




---



##### Table of Contents



September 30, 2007


December 31, 2006Effect of Change in





Effect of Change inInterest Rates





Interest RatesDecrease


Increase





Decrease


IncreaseFair Value


100 bps


100 bps


Fair Value


100 bps


100 bpsCash and cash equivalents

$
784,459


$
784,459


$
784,459


$
541,545


$
541,545


$
541,545Trading securities


1,406,416



1,459,540



1,342,330



541,175



573,028



522,503Available for sale securities


4,080,829



4,168,151



3,937,015



4,183,629



4,272,980



4,064,097Loans held for sale


14,040,416



14,163,706



13,959,965



9,566,224



9,645,767



9,440,968Loans held for investment


8,359,768



8,453,063



8,250,709



10,191,350



10,266,772



10,081,430MSRs


2,489,611



1,927,163



2,852,581



1,822,455



1,393,979



2,142,276Other assets


2,100,618



2,488,078



1,970,037



1,992,698



2,317,284



1,813,516Total assets

$
33,262,117


$
33,444,160


$
33,097,096


$
28,839,076


$
29,011,355


$
28,606,335Deposits

$
16,858,192


$
16,909,730


$
16,807,084


$
11,045,977


$
11,076,458


$
11,015,812Advances from Federal Home Loan Bank


11,155,176



11,310,713



10,998,732



10,409,767



10,565,054



10,256,128Other borrowings


1,505,093



1,505,718



1,504,469



3,464,290



3,466,577



3,462,006Other liabilities


482,803



482,803



482,803



775,455



775,455



775,455Total liabilities


30,001,264



30,208,964



29,793,088



25,695,489



25,883,544



25,509,401Shareholders equity (NPV)

$
3,260,853


$
3,235,196


$
3,304,008


$
3,143,587


$
3,127,811


$
3,096,934% Change from base case






(0.79
)%


1.32
%






(0.50
)%


(1.48
)%          51




---



##### Table of Contents



EXPENSES
    Three Months Ended


Nine Months EndedSeptember 30,


September 30,


June 30,


September 30,


September 30,2007


2006


2007


2007


2006Salaries and related

$
219,146


$
177,564


$
180,234


$
581,854


$
509,402Premises and equipment


27,799



19,955



24,961



77,057



57,039Loan purchase and servicing costs


14,127



14,246



14,057



43,210



40,301Professional services


10,034



8,263



8,853



28,751



24,529Data processing


20,002



16,831



20,331



60,089



46,864Office and related


14,589



17,423



16,977



47,693



50,120Advertising and promotion


8,804



10,742



9,659



28,098



34,368Operations and sale of foreclosed assets


10,640



557



4,291



17,111



1,484Other


7,285



3,315



5,920



18,242



9,640Deferral of expenses under SFAS 91


(62,728
)


(66,198
)


(61,258
)


(192,632
)


(195,599
)Total operating expenses


269,698



202,698



224,025



709,473



578,148Amortization of other intangible assets


430



430



430



1,290



694Total non-interest expense

$
270,128


$
203,128


$
224,455


$
710,763


$
578,842        52




---



##### Table of Contents



PROSPECTIVE
    TRENDS AND FUTURE OUTLOOK
  Alt-A start-up
    This Future Outlook section contains certain
    forward-looking statements. See the section of this
    Form 10-Q
    entitled Forward-Looking Statements for a
    description of factors which may cause our actual results to
    differ from those anticipated.
  OFF-BALANCE
    SHEET ARRANGEMENTS
    Accounting for Transfers and
    Servicing of Financial Assets and Extinguishment of
    Liabilities,
   53




---



##### Table of Contents



AGGREGATE
    CONTRACTUAL OBLIGATIONS
  10-K. 10-K
  CRITICAL
    ACCOUNTING POLICIES AND JUDGMENTS
  and/or 10-K
    OTHER
    CONSIDERATIONS
     54




---



##### Table of Contents



APPENDIX A:
    ADDITIONAL QUANTITATIVE DISCLOSURES
  10-Q
  TABLE OF
    CONTENTS
   
 Table



Page1


Product Profitability Analysis


562


S&P Lifetime Loss Estimates


623


Production by Product  FICO and
    CLTV


624


SFR Mortgage Loan Production and Pipeline by
    Purpose


635


SFR Mortgage Loan Production by Amortization
    Type


636


SFR Mortgage Loan Production by Geographic
    Distribution


647


MBR Margin


648


Servicing Fee Income


649


Mortgage Servicing Rights Rollforward


6510


Gain (Loss) on Mortgage-Backed Securities


6611


Unrealized Gains and Losses of Securities
    Available for Sale


6612


Mortgage-Backed Securities by Credit Rating


6813


Other Retained Assets


6814


Valuation of MSRs, Interest-Only, Prepayment
    Penalty, and Residual Securities


7015


Deposits by Channel and Product


71  55




---



##### Table of Contents



TABLE
    1. PRODUCT PROFITABILITY ANALYSIS
  and/or 10-K,
    HomeStandard


Specialty


Loans &


SpecialtyConsumer


Consumer


Related


Commercial








TotalHome Loans


Home Loans


Investments


Loans


Treasury


Overhead


CompanyThree Months Ended September 30, 2007Operating ResultsNet interest income

$
41,234


$
45,187


$
31,461


$
16,732


$
1,336


$
6,228


$
142,178Provision for loan losses






(6,852
)


(12,000
)


(79,427
)










(98,279
)Gain (loss) on sale of loans


(150,854
)


(96,628
)


(3,241
)


(203
)






(193
)


(251,119
)Service fee income (expense)






22,780



189,646



3







500



212,929Gain (loss) on MBS






(57,671
)


(35,998
)














(93,669
)Gain on sale and leaseback of building






















23,982



23,982Other income (expense)


6,966



9,457



2,388



906



237



1,638



21,592Net revenue (expense)


(102,654
)


(83,727
)


172,256



(61,989
)


1,573



32,155



(42,386
)Variable expenses


71,523



33,478



6,432



2,901











114,334Severance charges






















27,634



27,634Deferral of expenses under SFAS 91


(46,088
)


(12,376
)


(2,457
)


(1,807
)










(62,728
)Fixed expenses


60,310



25,174



22,736



7,258



3,568



71,842



190,888Pre-tax earnings (loss)


(188,399
)


(130,003
)


145,545



(70,341
)


(1,995
)


(67,321
)


(312,514
)Minority interests






















12,396



12,396Net earnings (loss)

$
(114,735
)

$
(79,202
)

$
88,638


$
(42,838
)

$
(1,215
)

$
(53,365
)

$
(202,717
)Balance Sheet DataAverage interest-earning assets

$
11,532,933


$
6,076,629


$
11,783,953


$
1,738,414


$



$
562,629


$
31,694,558Allocated capital

$
555,858


$
443,265


$
825,952


$
144,617


$



$
84,689


$
2,054,381Performance RatiosROE


(82
)%


(71
)%


43
%


(118
)%


N/A



N/A



(39
)%Net interest margin


1.42
%


2.95
%


1.06
%


3.82
%


N/A



N/A



1.78
%MBR margin


(0.91
)%


(12.12
)%


(0.32
)%


N/A



N/A



N/A



(1.54
)%Efficiency ratio


(84
)%


(60
)%


14
%


48
%


N/A



N/A



483
%Operating DataLoan production

$
12,796,864


$
3,027,703


$
954,343


$
282,788


$



$



$
17,061,698Loans sold

$
11,302,561


$
701,916


$
1,004,070


$



$



$



$
13,008,547Three Months Ended September 30, 2006Operating ResultsNet interest income

$
30,746


$
38,672


$
44,141


$
20,768


$
18


$
2,366


$
136,711Provision for loan losses






(566
)


(2,000
)


(2,422
)










(4,988
)Gain (loss) on sale of loans


87,979



62,106



10,140















160,225Service fee income (expense)






6,965



13,572











521



21,058Gain (loss) on MBS






(3,945
)


22,913















18,968Other income (expense)






8,379



1,760



2,332



150



979



13,600Net revenue (expense)


118,725



111,611



90,526



20,678



168



3,866



345,574Variable expenses


57,213



42,428



4,098



2,225











105,964Deferral of expenses under SFAS 91


(44,393
)


(18,371
)


(1,538
)


(1,896
)










(66,198
)Fixed expenses


48,004



25,262



14,013



5,173



2,227



68,683



163,362Pre-tax earnings (loss)


57,901



62,292



73,953



15,176



(2,059
)


(64,817
)


142,446Net earnings (loss)

$
35,262


$
37,782


$
45,038


$
9,243


$
(1,254
)

$
(39,891
)

$
86,180Balance Sheet DataAverage interest-earning assets

$
7,762,761


$
5,737,934


$
10,237,788


$
1,498,138


$



$
270,396


$
25,507,017Allocated capital

$
346,735


$
386,649


$
641,818


$
138,726


$



$
357,451


$
1,871,379Performance RatiosROE


40
%


39
%


28
%


27
%


N/A



N/A



18
%Net interest margin


1.57
%


2.67
%


1.71
%


5.50
%


N/A



N/A



2.13
%MBR margin


0.76
%


2.27
%


1.55
%


N/A



N/A



N/A



1.03
%Efficiency ratio


51
%


44
%


18
%


24
%


N/A



N/A



58
%Operating DataLoan production

$
19,032,639


$
4,278,249


$
606,713


$
521,575


$



$



$
24,439,176Loans sold

$
15,612,563


$
3,241,590


$
654,023


$



$



$



$
19,508,176  56




---



##### Table of Contents



Standard Consumer Home Loans Held for SalePrime


Subprime


TotalThree Months Ended September 30, 2007Operating ResultsNet interest income

$
40,020


$
1,214


$
41,234Provision for loan losses










Gain (loss) on sale of loans


(127,927
)


(22,927
)


(150,854
)Service fee income (expense)










Gain (loss) on MBS










Other income (expense)


6,651



315



6,966Net revenues (expense)


(81,256
)


(21,398
)


(102,654
)Variable expenses


65,597



5,926



71,523Deferral of expenses under SFAS 91


(42,270
)


(3,818
)


(46,088
)Fixed expenses


55,434



4,876



60,310Pre-tax earnings (loss)


(160,017
)


(28,382
)


(188,399
)Net earnings (loss)

$
(97,450
)

$
(17,285
)

$
(114,735
)Balance Sheet DataAverage interest-earning assets

$
11,372,088


$
160,845


$
11,532,933Allocated capital

$
546,082


$
9,776


$
555,858Performance RatiosROE


(71
)%


(701
)%


(82
)%Net interest margin


1.40
%


2.99
%


1.42
%MBR margin


(0.74
)%


(7.67
)%


(0.91
)%Efficiency ratio


(97
)%


(33
)%


(84
)%Operating DataLoan production

$
12,217,605


$
579,259


$
12,796,864Loans sold

$
11,023,703


$
278,858


$
11,302,561Three Months Ended September 30, 2006Operating ResultsNet interest income

$
28,035


$
2,711


$
30,746Provision for loan losses










Gain (loss) on sale of loans


82,833



5,146



87,979Service fee income (expense)










Gain (loss) on MBS










Other income (expense)










Net revenues (expense)


110,868



7,857



118,725Variable expenses


49,834



7,379



57,213Deferral of expenses under SFAS 91


(38,667
)


(5,726
)


(44,393
)Fixed expenses


43,552



4,452



48,004Pre-tax income (loss)


56,149



1,752



57,901Net income (loss)

$
34,195


$
1,067


$
35,262Balance Sheet DataAverage interest-earning assets

$
7,331,198


$
431,563


$
7,762,761Allocated capital

$
320,562


$
26,173


$
346,735Performance RatiosROE


42
%


16
%


40
%Net interest margin


1.52
%


2.49
%


1.57
%MBR margin


0.74
%


1.28
%


0.76
%Efficiency ratio


49
%


78
%


51
%Operating DataLoan production

$
18,321,539


$
711,100


$
19,032,639Loans sold

$
14,997,083


$
615,480


$
15,612,563  57




---



##### Table of Contents



and/or
  Specialty Consumer Home Loans Held for Sale and/or
    InvestmentHELOCs/


Reverse





DiscontinuedSeconds


Mortgages


CTP/Lot


Products


TotalThree Months Ended September 30, 2007Operating ResultsNet interest income

$
23,936


$
4,644


$
16,186


$
421


$
45,187Provision for loan losses


(800
)






(5,602
)


(450
)


(6,852
)Gain (loss) on sale of loans


(118,550
)


14,314



7,608







(96,628
)Service fee income (expense)


11,027



11,753











22,780Gain (loss) on MBS


(57,368
)






(303
)






(57,671
)Other income (expense)


3,576



11



5,870







9,457Net revenues (expense)


(138,179
)


30,722



23,759



(29
)


(83,727
)Variable expenses


4,691



18,900



9,887







33,478Deferral of expenses under SFAS 91


(3,377
)


(6,214
)


(2,785
)






(12,376
)Fixed expenses


4,007



13,329



7,773



65



25,174Pre-tax earnings (loss)


(143,500
)


4,707



8,884



(94
)


(130,003
)Net earnings (loss)

$
(87,391
)

$
2,836


$
5,410


$
(57
)

$
(79,202
)Balance Sheet DataAverage interest-earning assets

$
2,347,847


$
962,847


$
2,735,094


$
30,841


$
6,076,629Allocated capital

$
253,384


$
55,770


$
131,340


$
2,771


$
443,265Performance RatiosROE


(137
)%


20
%


16
%


(8
)%


(71
)%Net interest margin


4.04
%


1.91
%


2.35
%


5.42
%


2.95
%MBR margin


(65.47
)%


16.14
%


1.84
%


N/A



(12.12
)%Efficiency ratio


(4
)%


85
%


51
%


15
%


(60
)%Operating DataLoan production

$
634,634


$
1,079,592


$
1,313,477


$



$
3,027,703Loans sold

$
170,481


$
117,461


$
413,974


$



$
701,916Three Months Ended September 30, 2006Operating ResultsNet interest income

$
23,771


$
2,868


$
11,524


$
509


$
38,672Provision for loan losses










(516
)


(50
)


(566
)Gain (loss) on sale of loans


3,885



45,548



12,673







62,106Service fee income (expense)


1,366



5,599











6,965Gain (loss) on MBS


(3,898
)






(47
)






(3,945
)Other income (expense)


2,700



187



5,492







8,379Net revenues (expense)


27,824



54,202



29,126



459



111,611Variable expenses


13,444



20,319



8,665







42,428Deferral of expenses under SFAS 91


(8,544
)


(7,592
)


(2,235
)






(18,371
)Fixed expenses


2,964



14,486



7,735



77



25,262Pre-tax earnings (loss)


19,960



26,989



14,961



382



62,292Net earnings (loss)

$
12,156


$
16,282


$
9,111


$
233


$
37,782Balance Sheet DataAverage interest-earning assets

$
2,589,343


$
801,629


$
2,307,726


$
39,236


$
5,737,934Allocated capital

$
237,260


$
34,404


$
111,441


$
3,544


$
386,649Performance RatiosROE


20
%


188
%


32
%


26
%


39
%Net interest margin


3.64
%


1.42
%


1.98
%


5.15
%


2.67
%MBR margin


0.83
%


4.52
%


1.96
%


N/A



2.27
%Efficiency ratio


28
%


50
%


48
%


15
%


44
%Operating DataLoan production

$
1,839,049


$
1,128,203


$
1,310,997


$



$
4,278,249Loans sold

$
1,523,333


$
1,071,652


$
646,605


$



$
3,241,590  58




---



##### Table of Contents



Home Loans and Related InvestmentsRetained Servicing





SFR Loansand Retention





Held forActivities


MBS


Investment


TotalThree Months Ended September 30, 2007Operating ResultsNet interest income

$
146


$
19,199


$
12,116


$
31,461Provision for loan losses










(12,000
)


(12,000
)Gain (loss) on sale of loans


2,543







(5,784
)


(3,241
)Service fee income (expense)


189,646











189,646Gain (loss) on MBS


(4,959
)


(31,039
)






(35,998
)Other income (expense)


1,845







543



2,388Net revenues (expense)


189,221



(11,840
)


(5,125
)


172,256Variable expenses


6,432











6,432Deferral of expenses under SFAS 91


(2,457
)










(2,457
)Fixed expenses


17,186



901



4,649



22,736Pre-tax earnings (loss)


168,060



(12,741
)


(9,774
)


145,545Net earnings (loss)

$
102,349


$
(7,759
)

$
(5,952
)

$
88,638Balance Sheet DataAverage interest-earning assets

$
1,479,652


$
4,870,947


$
5,433,354


$
11,783,953Allocated capital

$
391,005


$
236,824


$
198,123


$
825,952Performance RatiosROE


104
%


(13
)%


(12
)%


43
%Net interest margin


0.04
%


1.56
%


0.88
%


1.06
%MBR margin


0.38
%


N/A



N/A



(0.32
)%Efficiency ratio


11
%


(8
)%


68
%


14
%Operating DataLoan production

$
954,343


$



$



$
954,343Loans sold

$
674,074


$



$
329,996


$
1,004,070Three Months Ended September 30, 2006Operating ResultsNet interest income

$
2,945


$
19,276


$
21,920


$
44,141Provision for loan losses










(2,000
)


(2,000
)Gain (loss) on sale of loans


9,392







748



10,140Service fee income (expense)


13,572











13,572Gain (loss) on MBS


17,283



5,630







22,913Other income (expense)


1,345



(14
)


429



1,760Net revenues (expense)


44,537



24,892



21,097



90,526Variable expenses


4,098











4,098Deferral of expenses under SFAS 91


(1,538
)










(1,538
)Fixed expenses


11,675



973



1,365



14,013Pre-tax earnings (loss)


30,302



23,919



19,732



73,953Net earnings (loss)

$
18,454


$
14,567


$
12,017


$
45,038Balance Sheet DataAverage interest-earning assets

$
559,843


$
3,845,961


$
5,831,984


$
10,237,788Allocated capital

$
228,070


$
193,709


$
220,039


$
641,818Performance RatiosROE


32
%


30
%


22
%


28
%Net interest margin


2.09
%


1.99
%


1.49
%


1.71
%MBR margin


1.44
%


N/A



N/A



1.55
%Efficiency ratio


32
%


4
%


6
%


18
%Operating DataLoan production

$
606,713


$



$



$
606,713Loans sold

$
654,023


$



$



$
654,023  59




---



##### Table of Contents



Specialty Commercial Loans Held for Sale and/or InvestmentWarehouse


CommercialSingle Spec


Subdivision


Lending


Lending


TotalThree Months Ended September 30, 2007Operating ResultsNet interest income

$
2,555


$
12,754


$
1,321


$
102


$
16,732Provision for loan losses


(1,148
)


(78,191
)


(88
)






(79,427
)Gain (loss) on sale of loans














(203
)


(203
)Service fee income (expense)














3



3Gain (loss) on MBS


















Other income (expense)


545



(204
)


375



190



906Net revenues (expense)


1,952



(65,641
)


1,608



92



(61,989
)Variable expenses


628



1,785







488



2,901Deferral of expenses under SFAS 91


(77
)


(1,444
)






(286
)


(1,807
)Fixed expenses


467



3,625



980



2,186



7,258Pre-tax earnings (loss)


934



(69,607
)


628



(2,296
)


(70,341
)Net earnings (loss)

$
569


$
(42,391
)

$
382


$
(1,398
)

$
(42,838
)Balance Sheet DataAverage interest-earning assets

$
217,496


$
1,264,835


$
190,996


$
65,087


$
1,738,414Allocated capital

$
19,456


$
104,399


$
15,211


$
5,551


$
144,617Performance RatiosROE


12
%


(161
)%


10
%


(100
)%


(118
)%Net interest margin


4.66
%


4.00
%


2.74
%


0.62
%


3.82
%Efficiency ratio


33
%


32
%


58
%


N/A



48
%Operating DataLoan production

$
36,466


$
121,106


$



$
125,216


$
282,788Loans sold

$



$



$



$



$
Three Months Ended September 30, 2006Operating ResultsNet interest income

$
3,245


$
16,488


$
1,035


$



$
20,768Provision for loan losses


(204
)


(2,200
)


(18
)






(2,422
)Gain (loss) on sale of loans


















Service fee income (expense)


















Gain (loss) on MBS


















Other income (expense)


1,163



703



466







2,332Net revenues (expense)


4,204



14,991



1,483







20,678Variable expenses


709



1,516











2,225Deferral of expenses under SFAS 91


(86
)


(1,810
)










(1,896
)Fixed expenses


581



3,395



1,134



63



5,173Pre-tax earnings (loss)


3,000



11,890



349



(63
)


15,176Net earnings (loss)

$
1,827


$
7,241


$
213


$
(38
)

$
9,243Balance Sheet DataAverage interest-earning assets

$
250,289


$
1,112,338


$
135,511


$



$
1,498,138Allocated capital

$
18,735


$
108,408


$
11,583


$



$
138,726Performance RatiosROE


39
%


26
%


7
%


N/A



27
%Net interest margin


5.14
%


5.88
%


3.03
%


N/A



5.50
%Efficiency ratio


27
%


18
%


76
%


N/A



24
%Operating DataLoan production

$
50,425


$
471,150


$



$



$
521,575Loans sold

$



$



$



$



$
  60




---



##### Table of Contents



MortgageServicing


Banking


Deposit


Corporate(1)


Total OverheadThree Months Ended September 30, 2007Operating ResultsNet interest income

$
(68
)

$
700


$
6,463


$
(867
)

$
6,228Provision for loan losses


















Gain (loss) on sale of loans


(189
)


(4
)










(193
)Service fee income (expense)














500



500Gain (loss) on MBS


















Gain on sale and leaseback of building














23,982



23,982Other income (expense)


579



176



1,152



(269
)


1,638Net revenues (expense)


322



872



7,615



23,346



32,155Variable expenses


















Severance costs














27,634



27,634Deferral of expenses under SFAS 91


















Fixed expenses


6,375



12,579



13,777



39,111



71,842Pre-tax earnings (loss)


(6,053
)


(11,707
)


(6,162
)


(43,399
)


(67,321
)Minority interests














12,396



12,396Net earnings (loss)

$
(3,686
)

$
(7,130
)

$
(3,753
)

$
(38,796
)

$
(53,365
)Balance Sheet DataAverage interest-earning assets

$



$
2,109


$
171


$
560,349


$
562,629Allocated capital

$
376


$
16,939


$
11,335


$
56,039


$
84,689Performance RatiosROE


N/A



N/A



N/A



N/A



N/ANet interest margin


N/A



N/A



N/A



N/A



N/AEfficiency ratio


N/A



N/A



N/A



N/A



N/AOperating DataLoan production

$



$



$



$



$
Loans sold

$



$



$



$



$
Three Months Ended September 30, 2006Operating ResultsNet interest income

$
(115
)

$
(73
)

$
3,954


$
(1,400
)

$
2,366Provision for loan losses


















Gain (loss) on sale of loans


















Service fee income (expense)














521



521Gain (loss) on MBS


















Other income (expense)


730



116



896



(763
)


979Net revenues (expense)


615



43



4,850



(1,642
)


3,866Variable expenses


















Deferral of expenses under SFAS 91


















Fixed expenses


5,104



10,263



11,127



42,189



68,683Pre-tax earnings (loss)


(4,489
)


(10,220
)


(6,277
)


(43,831
)


(64,817
)Net earnings (loss)

$
(2,734
)

$
(6,224
)

$
(3,823
)

$
(27,110
)

$
(39,891
)Balance Sheet DataAverage interest-earning assets

$



$
41


$
172


$
270,183


$
270,396Allocated capital

$
177


$
10,500


$
1,939


$
344,835


$
357,451Performance RatiosROE


N/A



N/A



N/A



N/A



N/ANet interest margin


N/A



N/A



N/A



N/A



N/AEfficiency ratio


N/A



N/A



N/A



N/A



N/AOperating DataLoan production

$



$



$



$



$
Loans sold

$



$



$



$



$
     (1)
    
    Corporate overhead under the product profitability analysis is
    different from the corporate overhead under the business segment
    results as certain elimination items are included here. 61




---



##### Table of Contents



TABLE
    2. S&P LIFETIME LOSS ESTIMATES
      Three Months EndedSeptember 30,

September 30,

June 30,2007

2006

2007Total S&P average lifetime loss estimates


0.49
%


0.87
%


0.63
%Total S&P evaluated production(1)

$
14,228


$
20,092


$
19,287     (1)
    
    While our production is evaluated using the S&P Levels
    model, the data is not audited or endorsed by S&P. S&P
    evaluated production excludes second liens, HELOCs, reverse
    mortgages, and construction loans.    TABLE
    3. PRODUCTION BY PRODUCT  FICO AND CLTV
    Three Months EndedSeptember 30, 2007


September 30, 2006


June 30, 2007Production


FICO


CLTV


Production


FICO


CLTV


Production


FICO


CLTVTotal production

$
17,062



N/A



N/A


$
24,439



N/A



N/A


$
23,023



N/A



N/ALess:HELOCs(1)/Seconds


637



731



80
%


1,840



716



87
%


876



724



85
%Reverse mortgages


1,080



N/A



58
%


1,128



N/A



53
%


1,258



N/A



57
%Consumer construction(1)


871



728



75
%


908



722



76
%


1,084



724



74
%Commercial real estate


125



N/A



66
%






N/A







45



N/A



67
%Builder construction commitments(1)


121



N/A



77
%


471



N/A



74
%


473



N/A



70
%Total S&P evaluated production

$
14,228



705



78
%

$
20,092



702



81
%

$
19,287



705



78
%     (1)
    
    Amounts represent total commitments. 62




---



##### Table of Contents



TABLE
    4. SFR MORTGAGE LOAN PRODUCTION AND PIPELINE BY
    PURPOSE
    As of and for the Three Months EndedSeptember 30,


September 30,


Percent


June 30,


Percent2007


2006


Change


2007


ChangeProduction and Pipeline by Purpose:SFR mortgage loan production:Purchase transactions

$
5,889


$
9,682



(39
)%

$
7,285



(19
)%Cash-out refinance transactions


7,389



10,656



(31
)%


10,577



(30
)%Rate/term refinance transactions


3,538



3,630



(3
)%


4,643



(24
)%Total SFR mortgage loan production

$
16,816


$
23,968



(30
)%

$
22,505



(25
)%% purchase and cash-out refinance transactions


79
%


85
%






79
%Mortgage industry market share


3.06
%


3.44
%


(11
)%


3.24
%


(6
)%SFR mortgage loan pipeline at period end(1):Purchase transactions

$
2,811


$
4,595



(39
)%

$
5,003



(44
)%Cash-out refinance transactions


2,871



5,210



(45
)%


4,848



(41
)%Rate/term refinance transactions


1,640



1,930



(15
)%


2,979



(45
)%Total specific rate locks


7,322



11,735



(38
)%


12,830



(43
)%Non-specific rate locks on bulk purchases


99



2,821



(96
)%


546



(82
)%Total SFR mortgage loan pipeline

$
7,421


$
14,556



(49
)%

$
13,376



(45
)%     (1)
    
    Total pipeline of loans in process includes rate lock
    commitments we have provided on loans that are specifically
    identified or non-specific bulk packages, and loan applications
    we have received for which the borrower has not yet locked in
    the interest rate commitment. Non-specific bulk packages
    represent pools of loans we have committed to purchase, where
    the pool characteristics are specified but the actual loans are
    not.  TABLE
    5. SFR MORTGAGE LOAN PRODUCTION BY AMORTIZATION TYPE
    Three Months EndedSeptember 30,


September 30,


June 30,2007


2006


2007SFR Mortgage Production by Amortization Type:Fixed-rate mortgages


25
%


20
%


24
%Intermediate term fixed-rate loans


7
%


7
%


7
%Interest-only loans


46
%


39
%


47
%Pay option ARMs


8
%


23
%


11
%Other ARMs


14
%


11
%


11
%100
%


100
%


100
%  63




---



##### Table of Contents



TABLE
    6. SFR MORTGAGE LOAN PRODUCTION BY GEOGRAPHIC
    DISTRIBUTION
    Three Months EndedSeptember 30,


September 30,


June 30,2007


2006


2007Geographic distribution:California


41
%


45
%


45
%Florida


8
%


8
%


8
%New York


7
%


6
%


7
%New Jersey


4
%


4
%


4
%Washington


3
%


2
%


3
%Other


37
%


35
%


33
%Total


100
%


100
%


100
%   TABLE
    7. MBR MARGIN
    ProductionSecondary


Total


Credit


Net MBRMBR


Net HFS


Market


Production


Costs/MBR


After


FAS 91Loans


Gross


Pipeline


After


Credit


Reserve


Credit


After


Production


Deferred


Net MBRSold


MBR


Hedging


Hedging(a)


Losses


Accrual


Costs(b)


Hedging (b/a)


Credit Costs


Cost


ReportedQuarter ended

(In millions)September 30, 2007


13,009



75



(27
)


48



(149
)


(25
)


(174
)


360
%


(126
)


(28
)


(154
)September 30, 2006


19,508



116



16



132



(3
)


(5
)


(8
)


6
%


124



(21
)


103June 30, 2007


20,194



91



40



131



(18
)


(12
)


(30
)


23
%


101



(21
)


80   TABLE
    8. SERVICING FEE INCOME
    Three Months EndedSeptember 30,


BPS


September 30,


BPS


June 30,


UPB2007


UPB


2006


UPB


2007


BPSService fee income:Gross service fee income

$
180,446



42


$
133,818



46


$
182,175



45Change in value due to portfolio run-off


(98,118
)


(23
)


(97,714
)


(33
)


(106,003
)


(26
)Service fee income, net of change in value due to portfolio
    run-off


82,328



19



36,104



13



76,172



19Change in value due to application of external benchmarking
    policies










(599
)






3,920



1Valuation adjustment due to market changes


7,421



2



(133,471
)


(46
)


218,739



54Gain (loss) on financial instruments used to hedge MSRs


123,180



29



119,024



41



(213,213
)


(53
)Total service fee income

$
212,929



50


$
21,058



8


$
85,618



21   64




---



##### Table of Contents



Nine Months EndedSeptember 30,


BPS


September 30,


BPS2007


UPB


2006


UPBService fee income:Gross service fee income

$
527,496



44


$
349,798



45Change in value due to portfolio run-off


(321,902
)


(27
)


(254,133
)


(33
)Service fee income, net of change in value due to portfolio
    run-off


205,594



17



95,665



12Change in value due to application of external benchmarking
    policies


3,920







(16,459
)


(2
)Valuation adjustment due to market changes


257,000



22



27,253



4Loss on financial instruments used to hedge MSRs


(118,781
)


(10
)


(27,265
)


(4
)Total service fee income

$
347,733



29


$
79,194



10     TABLE
    9. MORTGAGE SERVICING RIGHTS ROLLFORWARD
    Three Months Ended


Nine Months EndedSeptember 30,


September 30,


June 30,


September 30,


September 30,2007


2006


2007


2007


2006Balance at beginning of period

$
2,387,077


$
1,598,821


$
2,052,822


$
1,822,455


$
1,094,490Cumulative-effect adjustment due to change in accounting for MSRs


















17,561Net additions from loan sale or securitization


191,885



258,249



272,260



783,808



756,821Purchase or assumption






8,631



2,268



2,268



8,658Transfers to prepayment penalty and/or AAA-rated and agency
    interest-only securities






(2,601
)


(56,040
)


(57,065
)


(2,601
)Transfers due to
    clean-up
    calls and other


1,346







(889
)


(873
)


(274
)Change in fair value due to run-off


(98,118
)


(97,714
)


(106,003
)


(321,902
)


(254,133
)Change in fair value due to market changes


3,554



(133,471
)


218,739



253,133



27,253Change in fair value due to application of external benchmarking
    policies


3,867



(599
)


3,920



7,787



(16,459
)Balance at end of period

$
2,489,611


$
1,631,316


$
2,387,077


$
2,489,611


$
1,631,316MSRs as basis points of unpaid principal balance


143



131



142



143



131  65




---



##### Table of Contents



TABLE
    10. GAIN (LOSS) ON MORTGAGE-BACKED SECURITIES
    Three Months Ended


Nine Months EndedSeptember 30,


September 30,


June 30,





September 30,


September 30,2007


2006


2007





2007


2006Net gain (loss) on MBS:Realized gain (loss) on available for sale securities

$



$
3,520


$







$
(486
)

$
3,520Impairments on available for sale securities


(4,361
)


(3,782
)










(6,418
)


(5,718
)Unrealized gain (loss) on prepayment penalty securities


(7,666
)


13,250



(21,658
)






(31,527
)


17,907Unrealized gain (loss) on late fee securities


(675
)






582







(93
)


Unrealized gain (loss) on AAA-rated and agency interest-only
    securities


(5,221
)


(8,629
)


10,504







6,764



4,138Unrealized gain (loss) on non-investment grade residual
    securities


(38,672
)


8,125



(12,088
)






(53,385
)


7,208Net gain (loss) on trading securities and other instrument(1)


(37,074
)


6,484



(23,687
)






(60,217
)


(2,444
)Total gain (loss) on MBS, net

$
(93,669
)

$
18,968


$
(46,347
)





$
(145,362
)

$
24,611     (1)
    
    The amount for the three months ended September 30, 2007
    includes $29.8 million of credit related losses on
    non-investment grade securities.  TABLE
    11. UNREALIZED GAINS AND LOSSES OF SECURITIES AVAILABLE FOR
    SALE
    September 30,


September 30,


June 30,2007


2006


2007Amortized cost

$
4,411,854


$
4,449,860


$
4,564,495Gross unrealized holding gains


6,871



16,231



3,984Gross unrealized holding losses


(94,325
)


(43,611
)


(68,572
)Estimated fair value

$
4,324,400


$
4,422,480


$
4,499,907  66




---



##### Table of Contents



As of September 30, 2007Less Than 12 Months


12 Months or Greater


TotalUnrealized





Unrealized





UnrealizedLosses


Fair Value


Losses


Fair Value


Losses


Fair ValueSecurities  available for sale:AAA-rated non-agency securities

$
(16,947
)

$
1,279,753


$
(39,538
)

$
1,340,963


$
(56,485
)

$
2,620,716AAA-rated agency securities


(964
)


30,905



(56
)


12,925



(1,020
)


43,830Other investment grade securities


(35,990
)


404,060



(689
)


19,439



(36,679
)


423,499Residual securities


(141
)


3,131











(141
)


3,131Total securities  available for sale

$
(54,042
)

$
1,717,849


$
(40,283
)

$
1,373,327


$
(94,325
)

$
3,091,176    67




---



##### Table of Contents



TABLE
    12. MORTGAGE-BACKED SECURITIES BY CREDIT RATING
    December 31,September 30, 2007


2006Current


Net PremiumFace


(Discount) to


AmortizedValue


Face Value


Cost


Fair Value


Fair ValueAAA-rated mortgage-backed securities:AAA-rated non-agencies securities

$
3,940,397


$
27,389


$
3,967,786


$
3,915,650


$
4,648,446AAA-rated agency securities


442,901



1,603



444,504



443,516



65,175AAA-rated and agency interest-only securities














71,901



73,570AAA-rated principal-only securities














72,488



38,478Total AAA-rated mortgage-backed securities

$
4,383,298


$
28,992


$
4,412,290


$
4,503,555


$
4,825,669Prepayment penalty and late fee securities













$
88,239


$
97,576Other investment grade mortgage-backed securities:AA+

$
13,807


$
(866
)

$
12,941


$
12,437


$
7,513AA


417,485



(12,792
)


404,693



381,785



86,311AA-


18,976



(741
)


18,235



16,506



14,138A+


6,438



(190
)


6,248



5,836



A


170,782



(13,308
)


157,474



150,496



2,160A-


13,650



(68
)


13,582



12,281



BBB+


1,810



(706
)


1,104



1,104



BBB


106,112



(17,667
)


88,445



86,062



20,734BBB-


64,150



(7,522
)


56,628



57,649



58,397Total other investment grade mortgage-backed securities

$
813,210


$
(53,860
)

$
759,350


$
724,156


$
189,253Non-investment grade mortgage-backed securities:BB+

$
37,072


$
(8,679
)

$
28,393


$
28,393


$
7,299BB


154,972



(44,051
)


110,921



111,140



49,856BB-


22,022



(2,393
)


19,629



19,629



21,170B


66,368



(46,894
)


19,474



19,896



1,442CCC+


5,042



(2,949
)


2,093



2,093



CCC


4,096



(2,497
)


1,599



1,599



C


5,705



(3,721
)


1,984



1,984



Other


49,550



(44,228
)


5,322



5,545



407Total other non-investment grade mortgage-backed securities

$
344,827


$
(155,412
)

$
189,415


$
190,279


$
80,174Non-investment grade residual securities













$
225,815


$
250,573Total mortgage-backed securities













$
5,732,044


$
5,443,245     TABLE
    13. OTHER RETAINED ASSETS
   68




---



##### Table of Contents



Three Months Ended


Nine Months EndedSeptember 30,


September 30,


June 30,


September 30,


September 30,2007


2006


2007


2007


2006AAA-rated and agency interest-only and other investment grade
    securities:Beginning balance

$
702,852


$
252,318


$
375,434


$
262,823


$
170,851Retained investments from securitizations


135,988



18,149



233,375



428,553



63,954Purchases


80,807



7,369



60,048



199,654



72,366Transfer from MSRs










56,040



56,040



Transfer to non-investment grade securities


(4,896
)






(4,163
)


(10,498
)


Impairments


(134
)










(316
)


(183
)Sales


(54,581
)


(7,039
)


(16,644
)


(71,225
)


(29,978
)Clean-up
    calls exercised


















(108
)Cash received, net of accretion


(15,118
)


(3,503
)


(6,097
)


(28,287
)


(19,073
)Valuation gains (losses) before hedges


(48,861
)


(5,659
)


4,859



(40,687
)


3,806Ending balance

$
796,057


$
261,635


$
702,852


$
796,057


$
261,635Principal-only securities:Beginning balance

$
69,127


$
129,951


$
55,977


$
38,478


$
9,483Retained investments from securitizations


3,931



3,238



1,118



7,686



10,907Purchases










17,733



32,658



121,281Sales






(100,761
)










(100,761
)Cash received, net of accretion


(424
)


(2,278
)


(785
)


(1,573
)


(4,252
)Valuation gains (losses) before hedges


(146
)


5,008



(4,916
)


(4,761
)


(1,500
)Ending balance

$
72,488


$
35,158


$
69,127


$
72,488


$
35,158Prepayment penalty and late fee securities:Beginning balance

$
88,613


$
80,036


$
93,106


$
97,576


$
75,741Retained investments from securitizations


11,047



13,801



22,058



41,210



35,858Transfer from MSRs/residual securities


1,985



3,642



1,211



3,359



3,642Cash received, net of accretion


(5,065
)


(12,307
)


(6,686
)


(22,285
)


(34,726
)Valuation gains (losses) before hedges


(8,341
)


13,250



(21,076
)


(31,621
)


17,907Ending balance

$
88,239


$
98,422


$
88,613


$
88,239


$
98,422Non-investment grade securities:Beginning balance

$
183,323


$
88,045


$
110,204


$
80,173


$
57,712Retained investments from securitizations


21,446



3,324



65,908



113,265



34,205Purchases










9,758



11,585



Transfer from investment grade securities


4,896







4,163



10,498



Impairments


(223
)


(156
)






(326
)


(610
)Sales






(12,401
)










(12,401
)Cash received, net of accretion


(413
)


296



(969
)


(539
)


392Valuation losses before hedges


(18,750
)


(830
)


(5,741
)


(24,377
)


(1,020
)Ending balance

$
190,279


$
78,278


$
183,323


$
190,279


$
78,278Residual securities(1):Beginning balance

$
259,872


$
240,522


$
270,831


$
250,573


$
167,771Retained investments from securitizations, net(2)


1,679



23,608



13,397



38,783



109,417Transfer to prepayment penalty securities


(2,000
)


(1,041
)


(1,076
)


(3,076
)


(1,041
)Transfer due to
    clean-up
    calls and other














(5,615
)


Impairments


(4,004
)


(3,626
)






(5,774
)


(4,926
)Clean-up
    calls exercised










(2,106
)


(2,106
)


Cash received, net of accretion


7,115



(6,431
)


(7,565
)


6,414



(15,735
)Valuation gains (losses) before hedges


(36,847
)


8,626



(13,609
)


(53,384
)


6,172Ending balance

$
225,815


$
261,658


$
259,872


$
225,815


$
261,658     (1)
    
    Included in the residual securities balance at
    September 30, 2007 were $7.4 million of HELOC
    residuals retained from two separate guaranteed mortgage
    securitization transactions. There was no gain on sale of loans
    recognized in connection with these transactions.(2)
    
    Amounts retained consist of 100% in HELOCs for the three months
    ended September 30, 2007. 69




---



##### Table of Contents



TABLE
    14. VALUATION OF MSRs, INTEREST-ONLY, PREPAYMENT PENALTY, AND
    RESIDUAL SECURITIES
    Actual


Valuation AssumptionsGross Wtd.


Servicing


3-Month


Weighted


Lifetime


3-Month





RemainingBook


Collateral


Average


Fee/Interest


Prepayment


Average


Prepayment


Prepayment


Discount


CumulativeValue


Balance


Coupon


Strip


Speeds


Multiple


Speeds


Speeds


Yield


Loss Rate(1)September 30, 2007MSRs

$
2,489,611


$
173,915,457



7.04
%


0.34
%


12.0
%


4.18



20.1
%


16.5
%


9.1
%


N/AAAA-rated interest-only securities

$
71,901


$
5,398,591



6.60
%


0.49
%


12.1
%


2.70



18.5
%


15.0
%


12.9
%


N/APrepayment penalty securities

$
68,760


$
20,130,891



7.44
%


N/A



11.5
%


N/A



22.6
%


17.7
%


21.5
%


N/ALot loan residual securities


64,702


$
1,896,031



9.82
%


3.72
%


32.7
%


0.92



47.1
%


48.5
%


21.8
%


0.81
%HELOC residual securities


61,039


$
2,803,733



9.27
%


2.77
%


27.3
%


0.79



30.5
%


26.3
%


19.0
%


4.62
%Closed-end seconds residual securities


22,616


$
2,157,271



10.55
%


1.79
%


16.1
%


0.59



17.7
%


28.0
%


23.2
%


10.88
%Subprime residual securities


77,458


$
5,176,606



8.30
%


2.59
%


23.1
%


0.58



31.3
%


27.8
%


19.0
%


6.99
%Total non-investment grade residual securities

$
225,815September 30, 2006MSRs

$
1,631,316


$
124,394,943



6.96
%


0.37
%


18.2
%


3.59



24.8
%


18.2
%


9.6
%


N/AAAA-rated interest-only securities

$
68,440


$
4,424,080



6.68
%


0.52
%


12.7
%


2.95



16.7
%


17.2
%


13.6
%


N/APrepayment penalty securities

$
98,422


$
19,441,542



7.17
%


N/A



23.0
%


N/A



25.3
%


18.8
%


22.9
%


N/ALot loan residual securities


66,133


$
2,262,810



8.95
%


3.50
%


34.9
%


0.83



39.8
%


38.6
%


23.0
%


0.56
%HELOC residual securities


95,745


$
2,661,610



9.65
%


3.21
%


44.5
%


1.12



50.0
%


48.7
%


19.9
%


0.81
%Closed-end seconds residual securities


14,841


$
1,222,620



10.43
%


4.14
%


18.7
%


0.29



36.7
%


22.5
%


24.9
%


7.65
%Subprime residual securities


84,939


$
5,427,460



7.68
%


1.70
%


28.0
%


0.92



39.4
%


35.8
%


20.2
%


5.47
%Total non-investment grade residual securities

$
261,658June 30, 2007MSRs

$
2,387,077


$
167,710,148



7.06
%


0.35
%


18.1
%


4.12



20.7
%


19.1
%


8.7
%


N/AAAA-rated interest-only securities

$
136,267


$
5,860,016



6.57
%


0.74
%


17.5
%


3.14



19.6
%


18.5
%


12.7
%


N/APrepayment penalty securities

$
75,730


$
20,181,683



7.36
%


N/A



14.9
%


N/A



23.4
%


23.2
%


17.3
%


N/ALot loan residual securities


67,398


$
2,021,954



9.64
%


4.14
%


36.7
%


0.81



41.3
%


39.7
%


21.8
%


0.73
%HELOC residual securities


90,150


$
2,898,580



9.58
%


2.64
%


38.0
%


1.18



43.3
%


43.3
%


19.3
%


1.85
%Closed-end seconds residual securities


28,303


$
2,260,980



10.56
%


4.78
%


14.7
%


0.26



20.3
%


23.8
%


23.0
%


9.86
%Subprime residual securities


74,021


$
5,570,118



8.17
%


1.91
%


25.1
%


0.69



29.9
%


24.5
%


19.3
%


6.31
%Total non-investment grade residual securities

$
259,872     (1)
    
    As a percentage of the original pool balance, the actual loss
    rate to date totaled 1.33%, 2.80%, 0.83% and 0.01% for HELOC,
    closed-end seconds, subprime, and lot loans, respectively, at
    September 30, 2007. 70




---



##### Table of Contents



TABLE
    15. DEPOSITS BY CHANNEL AND PRODUCT
    September 30, 2007


September 30, 2006


December 31, 2006% of





% of





% ofTotal





Total





TotalAmount


Deposits


Amount


Deposits


Amount


DepositsDeposit ChannelBranch

$
6,750,823



40
%

$
4,729,699



47
%

$
5,211,365



48
%Internet


1,460,766



9
%


1,121,653



11
%


1,185,423



11
%Telebanking


1,820,054



11
%


1,249,974



12
%


1,290,595



12
%Money desk


5,976,053



35
%


2,358,272



23
%


2,593,719



24
%Custodial


766,942



5
%


651,421



7
%


616,904



5
%Total deposits

$
16,744,638



100
%

$
10,111,019



100
%

$
10,898,006



100
%     September 30, 2007


September 30, 2006


December 31, 2006Amount


Rate


Amount


Rate


Amount


RateDeposit ProductNon-interest-bearing checking

$
78,599



0.0
%

$
71,013



0.0
%

$
72,081



0.0
%Interest-bearing checking


56,579



1.7
%


51,333



1.2
%


54,844



1.2
%Savings


2,498,170



4.8
%


1,696,859



4.9
%


1,915,333



5.0
%Custodial accounts


766,942



0.0
%


651,421



0.0
%


616,904



0.0
%Total core deposits


3,400,290



3.6
%


2,470,626



3.4
%


2,659,162



3.6
%Certificates of deposit


13,374,348



5.2
%


7,640,393



5.0
%


8,238,844



5.2
%Total deposits

$
16,774,638



4.9
%

$
10,111,019



4.6
%

$
10,898,006



4.8
%  71




---



##### Table of Contents



ITEM 3.
    QUANTITATIVE
    AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK    ITEM 4.
    CONTROLS
    AND PROCEDURES  Rules 13a-15 15d-15 Form 10-Q
   72




---



##### Table of Contents



ITEM 1.
    FINANCIAL
    STATEMENTS  INDYMAC
    BANCORP, INC. AND SUBSIDIARIES
  CONSOLIDATED
    BALANCE SHEETS
 (Dollars in thousands)
  September 30,


December 31,2007


2006(Unaudited)ASSETSCash and cash equivalents

$
784,987


$
541,725Securities classified as trading


1,407,644



542,731Securities classified as available for sale


4,324,400



4,900,514Loans held for sale


14,022,234



9,467,843Loans held for investment, net of allowance for loan losses of
    $161,768 and $62,386 at September 30, 2007 and
    December 31, 2006, respectively


8,390,861



10,114,823Mortgage servicing rights


2,489,611



1,822,455Other assets


2,312,973



2,105,225Total assets

$
33,732,710


$
29,495,316LIABILITIES AND SHAREHOLDERS EQUITYLiabilitiesDeposits

$
16,774,638


$
10,898,006Advances from Federal Home Loan Bank


11,094,800



10,412,800Other borrowings


2,189,681



4,637,000Other liabilities


1,311,948



1,519,242Total liabilities


31,371,067



27,467,048Perpetual preferred stock in subsidiary


491,000



Shareholders EquityPreferred stock  authorized, 10,000,000 shares
    of $0.01 par value; none issued






Common stock  authorized, 200,000,000 shares of
    $0.01 par value; issued 104,901,301 shares and
    102,258,939 shares at September 30, 2007 and
    December 31, 2006, respectively


1,049



1,023Additional
    paid-in-capital,
    common stock


1,674,788



1,597,814Accumulated other comprehensive loss


(66,117
)


(31,439
)Retained earnings


767,883



983,348Treasury stock


(506,960
)


(522,478
)Total shareholders equity


1,870,643



2,028,268Total liabilities and shareholders equity

$
33,732,710


$
29,495,316    73




---



##### Table of Contents



INDYMAC
    BANCORP, INC. AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF OPERATIONS
 (Unaudited)
 (Dollars in thousand, except per share data)
  For the Three Months


For the Nine MonthsEnded September 30,


Ended September 30,2007


2006


2007


2006Interest incomeMortgage-backed and other securities

$
101,901


$
86,212


$
289,717


$
233,693Loans held for sale


283,882



196,924



825,301



551,564Loans held for investment


152,049



151,488



477,792



418,845Other


20,019



12,127



52,195



32,706Total interest income


557,851



446,751



1,645,005



1,236,808Interest expenseDeposits


170,540



113,758



441,225



280,841Advances from Federal Home Loan Bank


183,192



115,769



541,896



329,846Other borrowings


61,941



80,513



235,392



232,046Total interest expense


415,673



310,040



1,218,513



842,733Net interest income


142,178



136,711



426,492



394,075Provision for loan losses


98,279



4,988



126,170



11,040Net interest income after provision for loan losses


43,899



131,723



300,322



383,035Non-interest income (loss)Gain (loss) on sale of loans


(251,119
)


160,225



(32,545
)


503,083Service fee income


212,929



21,058



347,733



79,194Gain (loss) on mortgage-backed securities


(93,669
)


18,968



(145,362
)


24,611Fee and other income


45,574



13,600



87,302



37,276Total non-interest income (loss)


(86,285
)


213,851



257,128



644,164Net revenues


(42,386
)


345,574



557,450



1,027,199Non-interest expense


270,128



203,128



710,763



578,842Earnings (loss) before provision (benefit) for income taxes and
    minority interests


(312,514
)


142,446



(153,313
)


448,357Provision (benefit) for income taxes


(122,193
)


56,266



(60,013
)


176,545Net earnings (loss) before minority interests


(190,321
)


86,180



(93,300
)


271,812Minority interests


12,396







12,396



1,124Net earnings (loss)

$
(202,717
)

$
86,180


$
(105,696
)

$
270,688Earnings (loss) per share:Basic

$
(2.77
)

$
1.25


$
(1.46
)

$
4.07Diluted(1)

$
(2.77
)

$
1.19


$
(1.46
)

$
3.87Weighted-average shares outstanding:Basic


73,134



68,866



72,617



66,570Diluted(1)


73,134



72,286



72,617



70,009Dividends declared per share

$
0.50


$
0.48


$
1.50


$
1.38     (1)
    
    To avoid the antidilutive impact from diluted shares due to the
    Companys net loss for the three and nine months ended
    September 30, 2007, the diluted loss per share and
    weighted-average diluted shares outstanding are the same as
    basic loss per share and weighted-average shares outstanding.   74




---



##### Table of Contents



INDYMAC
    BANCORP, INC. AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY
    AND COMPREHENSIVE INCOME (LOSS)
 (Unaudited)
 (Dollars in thousands)
  AccumulatedAdditional


Other








TotalShares


Common


Paid-In-


Comprehensive


Retained


Treasury


ShareholdersOutstanding


Stock


Capital


Loss


Earnings


Stock


EquityBalance at December 31, 2005


64,246,767


$
934


$
1,318,751


$
(15,157
)

$
759,330


$
(520,417
)

$
1,543,441Comprehensive income:Net earnings


















270,688







270,688Other comprehensive income (loss), net of tax:Net unrealized gain on mortgage-backed securities available for
    sale














7,816











7,816Net unrealized loss on derivatives used in cash flow hedges














(14,036
)










(14,036
)Total comprehensive income


























264,468Cumulative-effect adjustment due to change in accounting for MSRs


















10,624







10,624Issuance of common stock


2,969,165



30



123,696















123,726Exercises of common stock options


800,993



8



21,807















21,815Exercises of warrants


2,466,974



25



54,125















54,150Compensation expense for common stock options










7,386















7,386Net officers notes receivable payments










100















100Deferred compensation and restricted stock amortization, net of
    forfeitures


426,489



4



7,663















7,667Purchases of common stock


(51,728
)


















(2,061
)


(2,061
)Cash dividends


















(93,484
)






(93,484
)Balance at September 30, 2006


70,858,660


$
1,001


$
1,533,528


$
(21,377
)

$
947,158


$
(522,478
)

$
1,937,832Balance at December 31, 2006


73,017,356


$
1,023


$
1,597,814


$
(31,439
)

$
983,348


$
(522,478
)

$
2,028,268Comprehensive income (loss):Net loss


















(105,696
)






(105,696
)Other comprehensive income (loss), net of tax:Net unrealized loss on mortgage-backed securities available for
    sale














(34,800
)










(34,800
)Net unrealized loss on derivatives used in cash flow hedges














(4,787
)










(4,787
)Change in post retirement benefit plan














4,909











4,909Total comprehensive loss


























(140,374
)Issuance of common stock


3,467,493



35



74,196















74,231Exercises of common stock options


144,212







6











2,577



2,583Exercises of warrants


63,888



1



1,405















1,406Compensation expense for common stock options










6,108















6,108Net officers notes receivable payments










320















320Deferred compensation and restricted stock amortization, net of
    forfeitures


296,459



(10
)


(5,061
)










14,444



9,373Purchases of common stock


(39,971
)


















(1,503
)


(1,503
)Cash dividends


















(109,769
)






(109,769
)Balance at September 30, 2007


76,949,437


$
1,049


$
1,674,788


$
(66,117
)

$
767,883


$
(506,960
)

$
1,870,643    75




---



##### Table of Contents



INDYMAC
    BANCORP, INC. AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF CASH FLOWS
 (Unaudited)
 (Dollars in thousands)
  For the Nine MonthsEnded September 30,2007


2006Cash flows from operating activities:Net earnings (loss)

$
(105,696
)

$
270,688Adjustments to reconcile net earnings (loss) to net cash used in
    operating activities:(Gain) loss on sale of loans


32,545



(503,083
)Compensation expense related to stock options and restricted
    stocks


15,481



15,053Other amortization and depreciation


104,264



54,240Change in valuation of mortgage servicing rights, including
    amortization


(1,514
)


243,339(Gain) loss on mortgage-backed securities, net


145,362



(24,611
)Provision for loan losses


126,170



11,040Provision (benefit) for deferred income taxes


(60,013
)


186,127Net (increase) decrease in other assets and liabilities


(133,416
)


38,742Net cash provided by operating activities before activity for
    trading securities and loans held for sale


123,183



291,535Net sales (purchases) of trading securities


(399,334
)


245,560Net purchases and originations of loans held for sale


(6,293,995
)


(5,933,894
)Net cash used in operating activities


(6,570,146
)


(5,396,799
)Cash flows from investing activities:Payments on loans held for investment, net


985,214



454,547Proceeds from sales of loans held for investment


510,253



9,185Purchases of mortgage-backed securities available for sale


(430,519
)


(570,884
)Proceeds from sales of and principal payments from
    mortgage-backed securities available for sale


1,270,610



652,610Net increase in investment in Federal Home Loan Bank stock, at
    cost


(66,925
)


(80,388
)Net decrease in real estate investment


1,740



7,483Net sale (purchases) of property, plant and equipment


49,799



(74,465
)Purchase of Financial Freedom minority interest






(40,000
)Net cash provided by investing activities


2,320,172



358,088Cash flows from financing activities:Net increase in deposits


5,874,312



2,436,235Net increase in advances from Federal Home Loan Bank


682,000



2,379,800Net increase (decrease) in borrowings


(2,503,076
)


97,920Net proceeds from issuance of common stock


74,231



123,726Net proceeds from issuance of trust preferred securities


30,000



128,000Redemption of trust preferred securities


(48,268
)


(28,587
)Net proceeds from stock options, warrants and notes receivable


4,309



76,065Proceeds from issuance of preferred stock by subsidiary


491,000



Cash dividends paid


(109,769
)


(93,484
)Purchases of common stock


(1,503
)


(2,061
)Net cash provided by financing activities


4,493,236



5,117,614Net increase in cash and cash equivalents


243,262



78,903Cash and cash equivalents at beginning of period


541,725



442,525Cash and cash equivalents at end of period

$
784,987


$
521,428Supplemental cash flow information:Cash paid for interest

$
1,109,796


$
779,203Cash paid (received) for income taxes

$
4,751


$
(48,685
)Supplemental disclosure of non-cash investing and financing
    activities:Net transfer of loans held for sale to loans held for investment

$
1,059,363


$
2,258,617Net transfer of loans held for investment to loans held for sale

$
1,066,503


$
Net transfer of mortgage servicing rights to trading securities

$
54,993


$
2,601    76




---



##### Table of Contents



INDYMAC
    BANCORP, INC. AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 September 30, 2007
 (Unaudited)
  NOTE 1 
    BASIS OF
    PRESENTATION    Form 10-Q Rule 10-01 Regulation S-X.
  10-K.
  NOTE 2 
    NEWLY
    ADOPTED AND NEW ACCOUNTING PRONOUNCEMENTS  Accounting
    for Uncertainty in Income Taxes Accounting for Income
    Taxes.
  Fair Value Measurements
  The Fair Value Option for Financial Assets and
    Financial Liabilities
 77




---



##### Table of Contents



INDYMAC
    BANCORP, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    No. FIN 39-1, Amendment of FASB Interpretation No. 39 (FSP 39-1). FSP 39-1 Offsetting of Amounts
    Related to Certain Contracts FSP 39-1 FSP 39-1 FSP 39-1, FSP 39-1 FSP 39-1. FSP 39-1
  NOTE 3 
    SEGMENT
    REPORTING   78




---



##### Table of Contents



INDYMAC
    BANCORP, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Mortgage Banking SegmentMortgage


MortgageProduction


Servicing


Thrift





TotalDivisions


Division


Segment


Other


CompanyThree months ended September 30, 2007Net interest income (expense)

$
50,572


$
(12,080
)

$
73,829


$
29,857


$
142,178Net revenues (expense)


(90,478
)


162,428



(141,544
)


27,208



(42,386
)Net earnings (loss)


(123,579
)


85,275



(104,411
)


(60,002
)


(202,717
)Allocated average capital


735,561



399,237



914,473



5,110



2,054,381Assets as of September 30, 2007

$
11,408,294


$
4,351,220


$
16,695,380


$
1,277,816


$
33,732,710Return on average equity


(67
)%


85
%


(45
)%


N/A



(39
)%Three months ended September 30, 2006Net interest income (expense)

$
41,218


$
(3,323
)

$
79,043


$
19,773


$
136,711Net revenues (expense)


204,391



47,672



102,823



(9,312
)


345,574Net earnings (loss)


68,981



20,056



46,016



(48,873
)


86,180Allocated average capital


509,136



269,464



820,043



272,736



1,871,379Assets as of September 30, 2006

$
7,687,438


$
2,431,620


$
16,318,328


$
948,097


$
27,385,483Return on average equity


54
%


30
%


22
%


N/A



18
%Nine months ended September 30, 2007Net interest income (expense)

$
161,681


$
(24,546
)

$
215,348


$
74,009


$
426,492Net revenues (expense)


253,180



295,225



(13,363
)


22,408



557,450Net earnings (loss)


(41,236
)


142,088



(58,971
)


(147,577
)


(105,696
)Allocated average capital


717,083



360,140



888,219



89,588



2,055,030Assets as of September 30, 2007

$
11,408,294


$
4,351,220


$
16,695,380


$
1,277,816


$
33,732,710Return on average equity


(8
)%


53
%


(9
)%


N/A



(7
)%Nine months ended September 30, 2006Net interest income (expense)

$
122,119


$
(6,840
)

$
231,485


$
47,311


$
394,075Net revenues (expense)


621,018



120,775



301,133



(15,727
)


1,027,199Net earnings (loss)


219,174



51,329



134,710



(134,525
)


270,688Allocated average capital


513,941



240,426



774,884



208,934



1,738,185Assets as of September 30, 2006

$
7,687,438


$
2,431,620


$
16,318,328


$
948,097


$
27,385,483Return on average equity


57
%


29
%


23
%


N/A



21
%   NOTE 4 
    STOCK-BASED
    COMPENSATION   79




---



##### Table of Contents



INDYMAC
    BANCORP, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Nine Months Ended September 30,2007


2006Expected volatility


28.68 - 30.20
%


28.11 - 28.44
%Expected dividends


5.08 - 6.76
%


4.00 - 4.60
%Weighted average expected term (in years)


5.20 - 5.50



6.89 - 7.34Risk-free rate


4.58 - 4.82
%


4.54 - 4.73
%     For the NineFor the Three Months Ended September 30,


Months Ended September 30,2007


2006


2007


2006Stock option compensation cost, before tax

$
1,723


$
2,422


$
6,108


$
7,386Stock option compensation cost, after tax


1,181



1,611



3,975



4,530Effect on basic earnings per share


0.02



0.02



0.05



0.07Effect on dilutive earnings per share


0.02



0.02



0.05



0.06           Three Months Ended


Nine Months EndedSeptember 30, 2007


September 30, 2007Weighted-





Weighted-Average





AverageGrant-Date





Grant-DateShares


Fair Value


Shares


Fair ValueNonvested, beginning of period


1,226,371


$
35.69



889,117


$
39.14Granted


46,493



18.68



585,300



29.74Vested


(2,519
)


34.49



(144,724
)


37.42Canceled and forfeited


(229,591
)


36.96



(288,939
)


37.11Nonvested, end of period


1,040,754



34.65



1,040,754



34.65  80




---



##### Table of Contents



INDYMAC
    BANCORP, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    NOTE 5 
    DEFINED
    BENEFIT PENSION PLAN      NOTE 6 
    OTHER
    ASSETS HELD FOR SALE    NOTE 7 
    SUBSEQUENT
    EVENTS   81




---



##### Table of Contents



PART II.
    OTHER INFORMATION
  ITEM 1.
    LEGAL
    PROCEEDINGS  Accounting for
    Contingencies
  ITEM 1A.
    RISK
    FACTORS  10-K
  Secondary
    mortgage market conditions could have a material adverse impact
    on our earnings and financial condition.
      Current
    and anticipated deterioration in the housing market and the
    homebuilding industry may lead to increased loss severities and
    further worsening of delinquencies and non-performing assets in
    our loan portfolios. Consequently, our results of operations may
    be adversely impacted.
     82




---



##### Table of Contents



near-term,
  ITEM 2.
    UNREGISTERED
    SALES OF EQUITY SECURITIES AND USE OF PROCEEDS      Total Number of


Maximum ApproximateTotal





Shares Purchased


Dollar Value (In Million) ofNumber of


Weighted


as Part of Publicly


Shares that may yet beShares


Average Price


Announced Plans or


Purchased Under thePurchased(1)


Paid per Share


Programs


Plans or Programs(2)Calendar Month:July 2007





$







$
300August 2007


248



20.71







300September 2007


150



23.12







300Total


398


$
21.62







300     (1)
    
    All shares purchased during the periods indicated represent
    withholding of a portion of shares to cover taxes in connection
    with vesting of restricted stocks or exercise of stock options.(2)
    
    Our Board of Directors previously approved a $500 million
    share repurchase program. Since its inception in 1999, we have
    repurchased a total of 28.0 million shares through this
    program. In January 2007, we obtained an authorization from the
    Board of Directors to repurchase an additional
    $236.4 million of common stock for a total current
    authorization of up to $300 million.  ITEM 6.
    EXHIBITS  4
.1

2000 Stock Incentive Plan, as amended.4
.2

2002 Incentive Plan, as Amended and Restated.10
.1

Amended and Restated Employment Agreement entered into
    September 17, 2007 between IndyMac Bancorp, Inc. and
    Michael W. Perry.10
.2

IndyMac Bank, F.S.B. Deferred Compensation Plan, Amended and
    Restated Effective as of January 1, 2008.10
.3

IndyMac Bancorp, Inc. Senior Manager Deferred Compensation Plan
    Amended and Restated Effective as of September 17, 2007.31
.1

Chief Executive Officers Certification pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002.31
.2

Chief Financial Officers Certification pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002.32
.1

Chief Executive Officers Certification pursuant to
    18 U.S.C. Section 1350, as adopted pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002.32
.2

Chief Financial Officers Certification pursuant to
    18 U.S.C. Section 1350, as adopted pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002.  83




---



##### Table of Contents



SIGNATURE
       By:
    /s/  MICHAEL
    W. PERRY   Chairman of the Board of Directors
 and Chief Executive Officer
  By:
    /s/  A.
    SCOTT KEYS   Executive Vice President
 and Chief Financial Officer
 84