IndyMac (IMB) resumes jumbo loans

Thrift and mortgage bank IndyMac (NYSE: IMB) recently announced that it will return to the jumbo mortgage space after briefly halting its lending operations due to the chaos in the lending space over the last month. For those who aren't familiar with the term "jumbo loan," these are mortgages that are greater than $417,000 in size. They are recategorized because the government mortgage companies Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE) can't buy mortgages above this level

This re-entrance to the space symbolizes confidence on from the executives and brass at IndyMac. This move also makes great strategic sense for the company because prime borrowers are facing huge rate increases in the jumbo mortgage space, allowing IndyMac to demand a higher yearly payment for these loans.

Despite their large size, this lending is a rather low-risk activity when compared to the much-publicized subprime mortgages. They are typically made to high-earners with very strong credit and income history. With the ability to charge higher rates in the current market, lending in the prime jumbo mortgage space should be a very attractive line of business for IndyMac. However, I'd still wait for the dust to fully settle before getting involved with any of these mortgage companies.