The fall of IndyMac
Feds seize bank - once a leading mortgage lender. It may turn out to be most expensive collapse ever. One thing is sure: The credit crisis is still with us.IndyMac is down. Fed has seized this once a leading mortgage lender. This shows that the credit crisis is still looming over the heads of the U.S. residents. IndyMac Bancorp Inc. is a mortgage lender. It was taken over by the Fed recently. The operations were shut down at 3 p.m. and transferred to Federal Deposit Insurance Corp
This is a dangerous happening for the IndyMac customers. Among the $19 billion in deposits, FDIC guarantees does not cover $1 billion. Among the customers, 10000 may lose half of the amount ($500 million). This will also have an affect of between $4 billion and $8 billion to the Deposit Insurance Fund.
The dull picture has caused panic among the investor which resulted in the wild ride of the shares of mortgage giants Fannie (FNM, Fortune 500) Mae and Freddie (FRE, Fortune 500) Mac. This also fuelled speculation of government intervention in these two mortgage lenders.
What now for IndyMac customers?
In the event of closure of a bank, traditional bank accounts are insured to at least $100,000 and Individual Retirement Account funds are insured to $250,000. Annuities and mutual funds are not insured in case of closure of a bank.
If you have multiple accounts in your name in the same bank, then your bank accounts are insured to $100000. If you have a joint account then with your spouse and a separate account of $100000, then both your accounts will be covered.
