June 13 (Bloomberg) -- IndyMac Bancorp Inc., the second- biggest independent U.S. mortgage company, was sued by investors who claimed it concealed losses in its loan portfolio.

IndyMac, based in Pasadena, California, made rosy statements about its capital position and didn't tell shareholders about its exposure to so-called nonperforming home loans, those close to defaulting, the investors said June 10 in a Los Angeles federal court complaint.

``As the housing and credit crisis deepened in the fall of 2007, defendants repeatedly assured investors IndyMac was safe and sound and further downplayed and concealed IndyMac's growing exposure to its nontraditional mortgage products,'' investors said, requesting class-action, or group, status for the case.

The company's loan production has declined for four straight quarters, and losses have totaled $896 million in the past three quarters. The company said May 12 it probably won't be profitable this year.

IndyMac didn't tell investors about its holdings in homebuilder loans and adjustable-rate mortgages, according to the complaint. Projections about earnings were ``reckless,'' the investors said.

IndyMac's misleading statements had the effect of artificially inflating its stock price, they said, citing a price of $24.55 a share in October 2007 as the highest during the period covered by the suit.

The lawsuit is ``totally bogus,'' IndyMac said today in a statement on its Web site. ``Missing a good faith forecast which contains appropriate disclosures of risk factors does not constitute a securities law violation.''

Industry Disaster

``The fact of the matter is that the current market has been a disaster for everyone in our industry, and IndyMac's shareholders have suffered along with the shareholders of many other financial institutions,'' the company said.

IndyMac fell to a five-year low, declining 13 cents to $1.45 in New York Stock Exchange composite trading.

The largest U.S. mortgage lender is Countrywide Financial Corp., based in Calabasas, California.

The case is Folsom v. IndyMac, 08-cv-03812, U.S. District Court, Central District of California (Los Angeles).

To contact the reporter on this story: Carlyn Kolker in New York at ckolker@bloomberg.net.

Last Updated: June 13, 2008 18:00 EDT