Mortgage lender IndyMac ( IMB) continued its free fall Tuesday, even as Federal Reserve Chairman Ben Bernanke attempted to soothe the financial markets.

The California-based lender collapsed more than 30% to 44 cents after saying it doesn't have enough capital to remain regarded as "well-capitalized" by regulators. IndyMac can't fund its lending with deposits acquired through independent brokers, and its request for a waiver from the Federal Deposit Insurance Corp. to allow for brokered deposits hasn't been approved, the company said. IndyMac also said it will lay off half of its workforce.

The company pinned blame on recent negative comments from Sen. Charles Schumer (D., N.Y.), which caused a run on the bank as depositors began pulling their money. Shares recently were losing 38% to 44 cents.

VMware ( VMW) fell $12.95, or 24.4%, to $40.24 after the company warned that 2008 revenue will be lower than projected and replaced its CEO and co-founder Diane Green. Paul Maritz, whose start-up company was recently acquired by VMware majority owner EMC ( EMC) was named president and CEO, effective immediately. VMware's 2008 revenue will be "modestly below the previous guidance of 50% growth over 2007," the company said.

EMC, which has a majority stake in VMware, saw its shares fall $1.75, or 11.6%, to $13.39.

Fannie Mae ( FNM) and Freddie Mac ( FRE) were both rebounding from big losses Monday. The government-sponsored mortgage lenders benefited from comments made by James Lockhart, director of the Office of Federal Housing Enterprise Oversight, who said an accounting change should not force the companies to boost their capital.

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