The IndyMac Will Not Be Back Tonight

Freddie Mac is not the only Mac company to get in trouble this week. California-based IndyMac, one of the largest US mortgage lenders collapsed under the credit crisis this week. Federal regulators barged in and seize the assets of the bank fearing that it could not meet withdrawals from its depositors.

It is the second largest bank to fail in the United States history. This happened on the same day that stocks in Freddie Mac and Fannie Mae dropped by 50%. Just like historical bank runs, depositors had withdrawn $1.3 billion from the bank in the 11 days preceding its collapse.

Depositors are only covered by the federal government for up to $100,000 in deposits. This is a rule that’s been in place since the Great Depression and anyone that hasn’t paid attention to banking law or federal deposit insurance was sadly misinformed and ignorant of their liability.

The subprime crisis is now entering into a stage where it is creating bank failure and depositors around the country need to be aware that they should not have more than $100,000 deposit in any one bank. Given the current climate if they have more than that they might as well be investing in ostrich feathers for all the good the money might do them at the bank collapses just like IndyMac did.

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One Response to “The IndyMac Will Not Be Back Tonight”

  1. Banks Are Crashing Maybe You Can Get a Better Deal! | Home Loan Focus Says:
    July 12th, 2008 at 3:39 pm

    [...] mentioned in a former article that one of the largest mortgage companies in the US collapsed this week.  That’s a sign that the mortgage crisis is turning into a banking crisis.  At the [...]

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