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| Thread ID: 91601 | 2008-07-12 06:14:00 | Major US Bank Fails! More Than 30 Words! | SurferJoe46 (51) | PC World Chat |
| Post ID | Timestamp | Content | User | ||
| 688115 | 2008-07-12 06:14:00 | It's like the 1928-29 runs on the banks here. We lost one of our larger banks today in a seizure by the Feds when the depositors tried to get all their money out in one fell swoop. The FDIC (Federal Depositors Insurance Corp) will have to pony up the money..and guess where it comes from? Yup! Us'ns! IndyMac Seized by U.S. Regulators; Schumer Blamed for Failure July 12 (Bloomberg) -- IndyMac Bancorp Inc. became the second- biggest federally insured financial company to be seized by U.S. regulators after a run by depositors left the California mortgage lender short on cash. The Federal Deposit Insurance Corp. will run a successor institution, IndyMac Federal Bank FSB, starting next week, the Office of Thrift Supervision said in an e-mail yesterday. The regulator blamed U.S. Senator Charles Schumer for creating a ``liquidity crisis'' after a letter on June 26, in which he expressed concern that the bank may fail. The Pasadena, California-based lender specialized in so-called Alt-A mortgages, which didn't require borrowers to provide documentation on their incomes. The demise adds to the crisis caused by the subprime collapse and may mean regulators will have to raise more money to support the federal deposit insurance program that repays customers when a bank fails. ``IndyMac is the vanguard, the precursor of more stuff coming,'' said Christopher Whalen, managing director of Institutional Risk Analytics, a market research company in Torrance, California. ``It's not surprising to see IndyMac resolved. What you have to ask is what's coming next. It's going to be a wave of medium to bigger-than-medium institutions.'' IndyMac's home state, where Countrywide Financial Corp. was also located before it was bought last week, has been among the hardest hit by foreclosures. California ranked second among U.S. states, with one foreclosure filing for every 192 households in June, 2.6 times the national average. IndyMac's Losses The lender racked up almost $900 million in losses as home prices tumbled and foreclosures climbed to a record. IndyMac becomes the largest OTS-regulated savings and loan to fail, according to the FDIC. Mortgages serviced by IndyMac will be turned over to the FDIC and the regulator will be reaching out to customers immediately, Chairman Sheila Bair said on a conference call yesterday. Customers will have access to funds this weekend via automated teller machines and electronically and by phone starting next week. The FDIC intends to sell IndyMac within 90 days, preferably as a single entity, Bair said. If that doesn't work, the lender will be sold off in pieces, she said. After peaking at $50.11 on May 8, 2006, IndyMac shares lost 87 percent of their value in 2007 and another 95 percent this year. The stock fell 3 cents to 28 cents yesterday. Schumer's Comments IndyMac came under fire last month from Schumer, the Democrat from New York, who said lax lending standards and deposits purchased from third parties left it on the brink of failure. During the 11 business days after Schumer explained his concerns in a June 26 letter, depositors withdrew more than $1.3 billion, the OTS said. ``This institution failed due to a liquidity crisis,'' OTS Director John Reich said in the statement. ``Although this institution was already in distress, I am troubled by any interference in the regulatory process.'' Schumer blamed IndyMac's own actions and regulatory failures for the bank's seizure. ``If OTS had done its job as regulator and not let IndyMac's poor and loose lending practices continue, we wouldn't be where we are today,'' Schumer, a New York Democrat, said in an e-mail yesterday. ``Instead of pointing false fingers of blame, OTS should start doing its job to prevent future IndyMacs.'' The failure will cost the federal deposit insurance program about $4 billion to $8 billion, the FDIC said. Some $1 billion of uninsured deposits are held by about 10,000 customers, the FDIC said. Those depositors will get an ``advance dividend'' equal to half the uninsured amount, according to the statement. Firing Workers The FDIC insures $100,000 per depositor per insured bank, according to the agency's Web site. Customers may qualify for more coverage depending on the type of accounts they own, and some retirement accounts have a $250,000 limit. IndyMac announced on July 7 that it was firing half its employees. The lender agreed to sell most of its retail mortgage branches to Prospect Mortgage, giving the Northbrook, Illinois based-company more than 60 branch offices with 750 employees. IndyMac also has a retail bank network with 33 branches and $18 billion in deposits, mostly insured by the FDIC. The company was started in 1985 by Countrywide founders Angelo Mozilo and David Loeb under the name Countrywide Mortgage Investments. In 1999, it converted into a bank from a real estate investment trust. That year, Michael Perry replaced Mozilo as chief executive officer. Under Perry's leadership, profit more than doubled from $118 million in 2000 to $343 million in 2006 amid the housing boom. The stock more than tripled over that stretch. Perry will not be continuing with the new FDIC-controlled institution, while other executives will be retained, Bair said. The FDIC's John Bovenzi will assume the CEO role. |
SurferJoe46 (51) | ||
| 688116 | 2008-07-12 07:33:00 | Sigh. Looks like the world is gonna go to hell pretty soon. |
qazwsxokmijn (102) | ||
| 688117 | 2008-07-12 07:37:00 | Saw it on NBC News tonite. Just hope that Fannie Mae and Freddie Mac don't fold as well or guys will be in trouble. Fannie Mae and Freddie Mac hold or guarantee around $5 trillion worth of mortgages. That’s roughly half of the $9.5 trillion debt of the United States. The fear is that a failure of one or both would wreak havoc on the nation’s financial system and the broader economy as well. |
paulw (1826) | ||
| 688118 | 2008-07-12 07:51:00 | The Pasadena, California-based lender specialized in so-called Alt-A mortgages, which didn't require borrowers to provide documentation on their incomes. Eh?! I would like to see someone in NZ try to get a home mortgage without proving an income. | Jen (38) | ||
| 688119 | 2008-07-12 07:54:00 | That would be like inviting trouble to look for a place to happen. | vitalstatistix (9182) | ||
| 688120 | 2008-07-12 16:51:00 | Eh?! I would like to see someone in NZ try to get a home mortgage without proving an income . Goes a lot deeper than you can see on the surface, Jen . What happened was that the banks and lenders HAD to make loans to "financially-depressed" (read: illegal immigrants, low- or no-income families, people on welfare and social programs for the down-n-outs), etc . Then the natural extension to people who had no work-related history and those who were NEVER going to work got into the same swing and since the banks could NOT, by law, ask if they made any money at all . . . . got all the drug dealers and ex-cons into nice homes on the gummermint's coattails . It was all in the quest of people like Jimmy Carter and the social-radical right-wingers who bent the banks over and MADE them accept the mortgages as a repayment for the slave era times; being paid to minorities who are six or seven generations removed from those antebellum, bellicose days . Bleeding heart liberals have destroyed many more institutions than just banks . I offer: The US School system . . . or baby-sitting associations The Supreme Courts by tying their hands The petroleum industry The automakers The actual list would take me 'way over my typical 30-word limit though . There are many businesses that HAVE to hire people who they KNOW are illegal . . but by law, the employers CANNOT ask . The employers CAN HOWEVER BE HELD ACCOUNTABLE for hiring an illegal worker with fines and jail . But they CANNOT ASK! Go figger!?!?!?!?!? An employer cannot ask: IF the applicant is in the US legally IF the applicant can read or write IF the applicant uses drugs on the job IF the applicant is a known pedophile (kinda bad in a school employment setting) IF the applicant has a criminal record IF the applicant is a member of an anarchist society If the applicant is wearing a shoe bomb, a concealed weapon or knife IF the applicant is male or female or "other" If the applicant is under psychological care for any condition at all The applicant's age or species While some of these may sound OK on the surface, it leads to abuses and illicit criminal activity . This is why the bank failed . It couldn't ask all the right, intelligent questions . My mortgage is at 23 . 225% interest . . I needed the tax write-off when I was working, but my newest neighbors are in a 0%, interest free loan for 30 years where the interest can then go to 4% for the final part of the pay off foir the next 30 years . They got a 60 year loan, mine is paid up after only 22 years . They paid zero-down; I paid $20,000 . 00 down Is that fair? |
SurferJoe46 (51) | ||
| 688121 | 2008-07-12 16:55:00 | Joe we should put GI first, You got the right idea.......... | rob_on_guitar (4196) | ||
| 688122 | 2008-07-12 21:12:00 | And I was going to blame Alan Greenspan for letting the US housing bubble develop over the last 10 years. There is no way that house prices should have doubled in the US (or elsewhere) in a time of low inflation. Unless the population doubled ! So it was all speculation and now as Jo says low doc loans that have caused the problem and the whole world is now paying for it. |
Digby (677) | ||
| 688123 | 2008-07-12 22:49:00 | Yes as usual, it is the poor and down trodden and sick and ill who are responsible for all the problems in the world, if only they would just disappear. The businessmen and stock brokers and financial advisers and politicians on the other hand are paragons of decency and upright citizens who would not participate in anything which might harm the economy of America. |
zqwerty (97) | ||
| 688124 | 2008-07-12 23:42:00 | Yes as usual, it is the poor and down trodden and sick and ill who are responsible for all the problems in the world, if only they would just disappear . The businessmen and stock brokers and financial advisers and politicians on the other hand are paragons of decency and upright citizens who would not participate in anything which might harm the economy of America . What myopia! Greed is not just a US problem . Let's talk about the Boxer Rebellion, The Panay Incident; The Fuzzy Wuzzy Wars; The Boston Tea Party; VietNam (French), French Mongolia; The Ivory Coast; The DeBeers family; The Gettys; The Firestones; ad barf-ium . It doesn't matter WHO pulls the shady deal . . . if there's a way to get some $$ outta something, there's an entrepeneur ready to steal it for himself . People are people all over the world and nastiness and greed are not just a product isolated to one continent . Not defending the US here as I too feel betrayed because the written ethics verses the actuality and obvious discordance it creates are so obvious . I'd feel the same no matter who is shoving the stick into my nether regions . |
SurferJoe46 (51) | ||
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