IndyMac Bancorp Inc. (NYSE: IMB) is continuing to see problems with raising enough money to stay in business. In fact, the bank has ceased taking loan applications. In addition to not taking new lending business, the company will lay off more than half of its workforce, about 3,800 employees.

The problem is that IndyMac hasn't lined up any new financing or capital investment and doesn't expect to recover until the mortgage market begins recovering. In other words, the rest of 2008 is going to be pretty harsh for the once high-flying mortgage lender. CEO Michael Perry said that U.S. banking regulators have asked IndyMac to submit a business plan that will show how the struggling lender will get back on its feet.

The retail and wholesale loan divisions will be closed to new business as the company tries to build its reverse mortgage business while maintaining the existing loans in its portfolio. Perry went on to say that "These are the largest and most difficult staff reductions we have ever had to make" in reference to IndyMac's looming layoffs. He also requested that IndyMac's board cut his $1 million annual salary in half (no word on bonus cuts). At least one banking CEO has a conscience, right?