What happened to IndyMac Bank and how will this "really" effect america as a whole?

Question

What happened to IndyMac Bank and how will this "really" effect america as a whole?

Answer 1

Good question.  I only just saw the story about IndyMac.  They're re-opening on Monday, this time as a "bank" and with protection from the FDIC.  

Can anyone tell me why they didn't have protection from the FDIC in the first place?  Who are these people?!  And who would do any business with an institution that wasn't FDIC-protected?  Dumb, dumb, dumb.  Maybe there need to be better regulations around that in that state.

I don't think it will have much of a wider impact.  Isn't it rather a small, local company?

MoneyEnergy

http://www.getmoneyenergy.com

Answer 2

IndyMac Bank stated that they shut down their mortgage lending operations because the FDIC determined that they were under capitalized given their exposure to bad loans in their loan portfolio.  IndyMac Bank stated they could not obtain other funding to carry themselves and to cover their under-capitalization so therefore it decided to maintain its focus on retail banking along with maintaining its reverse mortgage lending operation known as Financial Freedom.  On the issue as to how this will affect America the jury is really out on that.  Certainly if IndyMac Bank fails and is liquidated by the FDIC this will have negative implications to shareholders and customers.  On the whole they are a regional bank with operations primarily in California.  You can always find out what other areas they are doing business.  Given this fact the probable impact on a national basis would most likely be limited.  The greater impact to America as a whole would come from the affects caused by properties that they lent on going into foreclosure in as much as they were a national lender on both residential and commercial properties.

Terrence Tormey - Benchmark Lending - Office: [phone] - [e-mail] - www.BenchmarkLendingSolutionsUSA.com