On July 11, 2008, IndyMac Bank, F.S.B., Pasadena, CA was closed by the Office of Thrift Supervision (OTS) and the Federal Deposit Insurance Corporation (FDIC) was named Conservator.
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IndyMac becomes the largest OTS-regulated savings and loan to fail and second-biggest financial institution to close behind Continental Illinois in 1984, according to the FDIC.
Exciting for my Mother, maybe. She has a cd with them through her brokerage account. But less than the 100k limit so we will get to see how long it takes to settle. Broker tipped me off the other day that this was a possibility. Said it will pay accrued interest as well.
From the FDIC:
"IndyMac Bank, FSB had total assets of $32.01 billion and total deposits of $19.06 billion as of March 31, 2008."
And more interesting:
"As conservator, the FDIC will operate IndyMac Federal Bank, FSB to maximize the value of the institution for a future sale and to maintain banking services in the communities formerly served by IndyMac Bank, F.S.B."
which means they didn't just have another bank (at least not yet) take over the asset base.
Finally, if folks have assets over the FDIC limit:
"If it is determined that you have uninsured funds, the FDIC will generate and mail to you a Receiver Certificate. This certificate entitles you to share proportionately in any funds recovered through the disposal of the assets of IndyMac Bank, F.S.B. This means that you will eventually recover some of your uninsured funds. The FDIC declared a 50% advance dividend for uninsured deposits."
Finally, if folks have assets over the FDIC limit:
"If it is determined that you have uninsured funds, the FDIC will generate and mail to you a Receiver Certificate. This certificate entitles you to share proportionately in any funds recovered through the disposal of the assets of IndyMac Bank, F.S.B. This means that you will eventually recover some of your uninsured funds. The FDIC declared a 50% advance dividend for uninsured deposits."
So anyone that had $1,000,000 in Indybank just lost up to $450,000 to the miracle of fractional reserve banking?
So anyone that had $1,000,000 in Indybank just lost up to $450,000 to the miracle of fractional reserve banking?
No, not yet. It only says you will immediately (well, on Monday) get access to the $100k insured plus 50% of the 900k uninsured. So, you would get at least 550k of the 1M back.
The rest depends upon how well the FDIC does with the remaining assets. I would assume there would be at least some, otherwise they wouldn't have felt comfortable giving the 50% back now...
[I just noticed you said "lost up to"...well, worse case yes.]
IndyMac came under fire last month from U.S. Senator Charles Schumer, who said lax lending standards and deposits purchased from third parties left it on the brink of failure. In the 11 business days after Schumer explained his concerns in a June 26 letter, depositors withdrew more than $1.3 billion, the OTS said.
IndyMac came under fire last month from U.S. Senator Charles Schumer, who said lax lending standards and deposits purchased from third parties left it on the brink of failure. In the 11 business days after Schumer explained his concerns in a June 26 letter, depositors withdrew more than $1.3 billion, the OTS said.
Wow. And From the WSJ:
The collapse is expected to cost the Federal Deposit Insurance Corp. between $4 billion and $8 billion, potentially wiping out more than 10% of the FDIC's $53 billion deposit-insurance fund. (emphasis mine)and
The director of the Office of Thrift Supervision, John Reich, blamed IndyMac's failure on comments made in late June by Sen. Charles Schumer (D., N.Y.), who sent a letter to the regulator raising concerns about the bank's solvency. In the following 11 days, spooked depositors withdrew a total of $1.3 billion. Mr. Reich said Sen. Schumer gave the bank a "heart attack." "Would the institution have failed without the deposit run?" Mr. Reich asked reporters. "We'll never know the answer to that question."
After the market closed, the shares are trading at only $0.10, so you could buy the bank for <$10MM and then get $32B in assets. Only downside is all the liabilities that come with it, but I'm sure the FDIC would cut you a deal...
Having gone through one of these before.... the FDIC usually will run the bank to see what it really has... sometimes a few weeks, sometimes a few months... then they will put it up for bid... trying to slice and dice it so they can get maximum value...
Indymac IIRC did mostly mortgages... the packaged them up and sold on the open market.... so there are some of my old buddies who are now worried about who will service these loans if nobody is interested in buying the service rights.... not a pretty picture... I went through it once....
Probably not the only one that will go under either... interest rates are down and mortgages are still going under...
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Join Date: Apr 2003
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Quote:
Originally Posted by DblDoc
I heard an estimate of $1 billion in accounts exceeding the FDIC limits
DD
This is astonishing as this bank has been struggling for months with the stock having lost most of its value. Why would anyone take chances here for almost zero extra return?
Ha
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“I’ve had a perfectly wonderful evening. But this wasn’t it.”-Groucho
So we see the OTC in action Friday afternoon (post 4 PM EST) closing and reopening as something on Monday morning (post 9 AM EST). Next week may be the time that the two biggest Mortgage institutions go; although everyone in the Government says no "they are fine". If the stock price reaches 0 or very close that what happens? We are running out of institutions to take them over? Maybe the China Sovereign Fund? Iraq Oil Fund? Saudi? Looks like all that Oil money will be coming back!
__________________ Proud Vietnam Veteran: Cu Chi 66, 1 Bde, 25ID & Pleiku 66-67 41st Sig Bn 1st STRATCOM - Army Retired Jun 1979.
I wonder how many depositors were ever warned by the bank that they had excess funds deposited that may not ever be replaced by the FDIC if the bank went belly up. I'll bet IndyMac never turned away anyone's deposits.
Today's typical computer savvy 15 year old could probably program the bank's computer to red-flag deposits exceeding FDIC limits. The kid probably wouldn't even have to go to the bank to do it, just hack-in from the outside.
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