The Federal Deposit Insurance Corp. plans soon to sign a major lease of office space in Orange County, probably in Irvine, where as many as 600 people would liquidate the assets of troubled banks and thrifts based in California and other Western states.
The agency needs 200,000 square feet of space and has looked at locations across Southern California, FDIC spokesman David Barr said.
"It's a temporary office -- three to five years is what we're looking at," Barr said Tuesday. "We hope to find the space within the next few weeks."
Thanks largely to the housing bubble, not a single U.S. bank or thrift failed from June 2004 through February 2007, the longest collapse-free stretch in the FDIC's 75-year history. But three banks went under last year, 15 have folded this year, and the FDIC has warned of more failures in coming years.
A contingent of FDIC officials has been occupying the Pasadena headquarters of IndyMac Bank, a giant mortgage lender that failed in July. Barr said the FDIC wanted its new office to be reasonably close to IndyMac. The first 100 or so employees could be in the new office by December.
If no buyer emerges for all of IndyMac, the FDIC could wind up with billions of dollars in high-risk IndyMac mortgages -- loans that the agency, as the current operator of IndyMac, has been trying to modify en masse to stem foreclosures.
The FDIC is already burdened with troubled assets from failed banks in Arizona and Nevada, which like California have seen huge declines in home values.
The agency's search for new office space has included sites near Pasadena and in the Inland Empire but is now focused on Orange County, particularly Irvine, said a person briefed on the process who wasn't authorized to discuss it publicly and spoke on condition of anonymity. The agency's only other location for handling the liquidation of troubled assets is a permanent office in Dallas.
Orange County was home to several major subprime lenders whose risky home loans helped trigger the nationwide mortgage meltdown, which has morphed into a full-fledged financial crisis including a surge of bank failures that the FDIC is charged with cleaning up.
And it is the collapse of those non-bank lenders that has helped create a glut of office space as well as a surplus of former loan professionals, both of which made locating in the county more attractive to the FDIC, the person briefed on the search said.
