IndyMac Dividend Faces Pit Stop

Analysts on average, according to Thomson Financial, expect the company to post a loss of 26 cents a share in the December-ending quarter.

IndyMac's pessimistic outlook comes as the mortgage environment steadily worsens, even from what seemed to be disastrous conditions this summer. Delinquencies and defaults have significantly risen compared to a year earlier, the secondary market has shut down as a result of investor fear of taking on risky mortgage-backed securities, but now problems may further emerge within the government-sponsored enterprises, Fannie Mae(FHM Quote - Cramer on FHM - Stock Picks) and Freddie Mac(FRE Quote - Cramer on FRE - Stock Picks).

Countrywide Financial(CFC Quote - Cramer on CFC - Stock Picks), however, has been the hardest hit among the big mortgage lenders. Its stock has lost around two-thirds of its value this year due to mortgage industry deterioration. The company has been struggling to find funding to originate mortgage loans as the credit crunch intensifies.

Shares of IndyMac also have lost around 80% this year. In the third quarter, IndyMac posted a loss of $202.7 million, or $2.77 a share -- a deficit six times as big as analysts were expecting. Revenue plummeted to a negative $42.3 million from $346 million in the comparable period last year.

The lender had warned in early September that it was firing 10% of its staff and slashing its dividend in half to 25 cents a share. The company had said at the time that it expected to post a third-quarter loss of as much as 50 cents a share.

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