IndyMac bank failure | 3rd largest in US history
IndyMac is a deposit taking institution in the US, that only lends mortgages, and specialises in sub prime. Federal regulators took it over Friday, and it will re-open Monday under FDIC supervision.
IndyMac seized as financial troubles spread | Reuters
IndyMac joins top bank failures headed by the 1984 collapse of Continental Illinois National Bank & Trust Co.The Office of Thrift Supervision (OTS) insisted IndyMac’s failure was the second-largest bank failure based on FDIC figures. But the FDIC said its data showed it was third behind the collapse of First RepublicBank Corp in 1988.
Those with multiple accounts under $100,000 but totaling more than $100,000 are probably screwed. During the S & L mess I had a friend with three accounts each under $100,000 that totaled $230,000. She was reimbursed a total of $100,000. Those at the S & L assured her all the money was insured. There was another S & L across the street. She lobbied Congress to no avail.
John back pain Austin
July 13, 2008 at 14:20
Wondering if
These bad loans were made worse by lenders trying their best to make loans to illegal aliens. Even now the banks advertise taking a loan to give your fifteen year old daughter a coming out (quinsineta) party!? How ironic. What a stupid thing to borrow money for… and it is still going on. The legal citizens get stuck with the bill while the lenders who made fat cash get bailed out and the illegal goes back to Mexico with a truck load of furniture that we will pay for!
Where is the journalist who will investigate where the money went? Who will uncover and expose the enormous influence these corporate monsters have exerted over OUR government?
Elwood
July 13, 2008 at 18:52
Imprudent lending practices seems to be the culprit here. The sales people are given high targets and they push the loans disregarding norms of knowing the consumer. All is fine in times of easy credit where one loan can be paid off by borrowing from another but when the going gets tough……
moneymanagement
July 13, 2008 at 22:08
[...] July 11 – The FDIC rolls up… tells Indy that they gave it a nice try, but since they couldn’t figure it out… the big boys are here to shut the game down. [...]
IndyMac Bank Failure | Personal Finance Analyst
July 14, 2008 at 20:28
thanks for stopping by everyone. @Elwood, indeed there is a story there for a journalist who wants to take the personal angle. I since read in the Financial Times that the combined Fannie/Freddie debt is $5 trillion. That amount is equal to the US national debt … in other words this doubles the US national debt, albeit with secured debt, but debt nonetheless.
Colin
July 14, 2008 at 21:24
Now that IndyMac is the first of many banks to fail, I think we’re going to see a lot more banks, not only close for the weekend, but close for good and go bankrupt. Rumors talk about 90+ banks, I think that’s a little exaggerated, but very well possible. I would guesstimate around 30+ banks will close shop.
I’m an investor in the stock market and have started to build a position in Bank of America. One of the few 500 lb. gorillas left in the room. Every dip, I pick up more shares. I don’t think there going anywhere, but you never know. Investments are all risky.
I never thought I would see this happen here in the USA, but here we are….let’s all cross our fingers.
petes2cents.com
petes2cents
July 15, 2008 at 15:39
@pete2cents … re BofA the general market consensus is that the regional banks are most at risk, based on liquidity, market risk and ability to handle big write offs.
Colin
July 15, 2008 at 18:00
My mortgage is with IndyMac and they were not at all truthful with me concerning my loan. It was suppose to be an interest only loan as I have been trying to sell it, but that payment is more than what I make a month. So what equity I have in the house is disappearing because it’s a Negative Amortization……I’ve made several phone calls to the company, most have not been returned and the ones I have spoken with “sympathize” with me but are unable to help. What will happen to my loan???
Upsethomeowner
July 16, 2008 at 14:14