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July 14, 2008

IndyMac Goes Bankrupt - What You Should Do Now

By now, most of you have heard that the FDIC has taken over IndyMac Bank. IndyMac made its name in the industry by offering mortgages to consumers who were not able to document their income, and as loan defaults kept piling up, the bank was no longer able to stay afloat. The FDIC will continue to operate the bank under the name IndyMac Federal Bank for a transition period and then sell it back to the private sector.

If you had money at IndyMac:

  • If you had $100,000 or less in the bank, your money is fully insured and you can withdraw it via check, ATM or at the branch.
  • About 10,000 customers had more than $100,000 in their accounts. If you are one of these people, the first $100,000 is safe, and the FDIC is advancing half of the remainder until a final settlement. Whether you get more depends on how much the FDIC can get for the bank’s assets when they return it to private hands.

If you didn’t have any money at IndyMac:

The FDIC maintains an internal watch list of some 90 banks that are in a precarious situation. They keep this list confidential, since publishing it could trigger a run on these banks which could them force them to go under.

So use this as an opportunity to take what happened with IndyMac as a lesson and never keep more than $100,000 at the same institution.

Posted by George Favvas
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One Response to “IndyMac Goes Bankrupt - What You Should Do Now”:

  1. Petes2cents says:

    July 14th, 2008 at 1:52 pm

    Now that IndyMac is the first of many banks to fail, I think we’re going to see a lot more banks, not only close for the weekend, but close for good and go bankrupt. Rumors talk about 90+ banks, I think that’s a little exaggerated, but very well possible. I would guesstimate around 30+ banks will close shop.

    I’m an investor in the stock market and have started to build a position in Bank of America. One of the few 500 lb. gorillas left in the room. Every dip, I pick up more shares. I don’t think there going anywhere, but you never know. Investments are all risky.

    I never thought I would see this happen here in the USA, but here we are….let’s all cross our fingers.

    petes2cents.com

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