Biggest Bank failure in US! IndyMac – $20 billion – goes under..

Last updated on: July 12, 2008 at 11:14 pm by Desh Kapoor

Biggest Bank failure in US! IndyMac – $20 billion – goes under.. 2008-07-12T23:14:31-05:00 Desh Kapoor

LOGO Patheos Explore the world's faith through different perspectives on religion and spirituality! Patheos has the views of the prevalent religions and spiritualities of the world.

Image via Wikipedia

Today a USD 20 billion IndyMac bank went down. Got an email from a friend who gave an account of how it affects at the personal level..

Indy Mac bank based in California was taken over by FDIC on 7/11/2008 at 3:00 PM PDT and is the largest Bank Failure ever. It is strongly suggest that you review all bank accounts and keep the limits below $100,000 for bank accounts and below $500,000 for Brokerage.

My friend’s Dad had an account with > $30,000 at Indy Mac bank and he tried to get his money out last week and they said that they could not find his signature card, and refused his withdrawal. He then asked if they could wire the funds out, and they said that he would need to submit a notarized document requesting the wire. UNBELIEVABLE!!!

His dad’s account is fully insured, but most likely he will lose 1 months of Interest since his interest would have posted on 7/15/2008 and the bank went under on 7/11/2008.

There has been a lot of news around WAMU (Washington Mutual) and Lehmann Brothers, and they are also very large and could possibly go under. It is highly advisable to reduce all accounts EVERYWHERE below the insurance limits. Especially vunerable are all business accounts, which often have balances greater than the FDIC limits.

Please feel free to forward to others that you feel could benefit from such knowledge.

So, guys keep tabs on your banker and brokers, as many of them are moving to the fly-by-night operation style. You should check out the notice posted on the bank’s website – its amazing how a $20 billion dollar instution “closes” down overnight, and is opened the following business day taken over by the FDIC!!! The FDIC anticipates that $19 Billion of the $20 billion on deposit was insured. The FDIC expects that the $1 Billion in uninsured depositors will recover approximately 50% of their “investment” above the FDIC insurance limits.

How the failure happened?

IndyMac grew rapidly during the real estate and home building boom. Its specialty was so-called Alt-A loans, those for which home buyers were asked to produce little or no evidence of income or assets other than the house they were buying.

While home prices climbed, Alt-A loans posed few problems for IndyMac. If a buyer wasn’t able to afford his payments, the bank got title to a home worth more than the amount owed. The bank was also able to find investors eager to buy pools of those mortgages that had been pulled together into securities backed by the future payments.

But when the housing bubble burst and prices began to fall, losses at IndyMac began to rise. Investors ran away from the mortgage-backed securities, leaving the bank to suffer the loan losses itself and without the funding it needed to make new, safer loans.

Technorati : Bank, Bankruptcy, IndyMac

Business

Previous Post

July 11, 2008

Nepal's Islamicisation?

Next Post

July 12, 2008 Tony Snow dies of cancer

Browse Our Archives

Select a Category Aarti Achievement and Leadership AfPak Africa Annual and Year-end Asia Audio Australia Behavioural Sciences Bhagwad Gita Bhagwad Gita Blogging Blogs Business Business Intelligence Business Strategy Cannes Careers Chanakya China Conservation Corruption Creative Daily Links Desh Poems Development & Welfare Devotional Audio Devotional Songs Drama Earth Economics Education Entertainment Environment Europe Everyday Quotes Featured Articles Featured Songs Finance Flickr Pictures Food Geo-Political Global Warming Globalization Health & Medicine Hinduism Historic History Humour India Indian Culture Indian music Indian Weddings Israel Issues Legal Link Love Minorities Misc Motivation and Personal Development Movie Lists Movie Reviews Movies Mumbai terror attacks Natural Disasters Nature News Outsourcing Pakistan Parenting Personal Philosophy Poetry Politics Poverty Quotes Recipe Regular Blog Post Relationships Religion Religious/Spiritual Audio Sciences Showcase Slideshow South Asia Special Stories Spiritual Quotes Spirituality Sports Stories Strategy Technology Technology Terrorism Travel Uncategorized US Video Women Women_s Rights Worship Yoga

Select a Month December 2015 November 2015 October 2015 September 2015 August 2015 June 2015 April 2015 March 2015 February 2015 September 2014 August 2014 January 2014 November 2013 October 2013 September 2013 August 2013 July 2013 June 2013 April 2013 March 2013 February 2013 January 2013 December 2012 November 2012 October 2012 September 2012 August 2012 July 2012 June 2012 May 2012 April 2012 March 2012 February 2012 January 2012 December 2011 November 2011 October 2011 September 2011 August 2011 July 2011 June 2011 May 2011 April 2011 March 2011 February 2011 January 2011 December 2010 November 2010 October 2010 September 2010 August 2010 July 2010 June 2010 May 2010 April 2010 March 2010 February 2010 January 2010 December 2009 November 2009 October 2009 September 2009 August 2009 July 2009 June 2009 May 2009 April 2009 March 2009 February 2009 January 2009 December 2008 November 2008 October 2008 September 2008 August 2008 July 2008 June 2008 May 2008 April 2008 March 2008 February 2008 January 2008 December 2007 November 2007 October 2007 September 2007 August 2007 July 2007 June 2007 May 2007 April 2007 March 2007 February 2007 January 2007 December 2006 November 2006 October 2006 September 2006 August 2006 July 2006 June 2006 May 2006 April 2006 March 2006 February 2006 January 2006 December 2005 November 2005 October 2005 September 2005 August 2005

TAKE THE

Religious Wisdom Quiz

What does "do not worry about tomorrow" teach?

Select your answer to see how you score.

Only seek money Trust God for the future Worry all the time Ignore everything