Why did IndieMac bank fold?

Question

So what happens to those people who have more money that what the FDIC covers in their accounts?

Answer 1

,i would think because of the housing market, to many foreclosures,  its all about that balloon interest thing instead of a fixed rate when Ur interest rate goes from 6% to 18% your house payment will almost double and that means trouble people are bankrupt ,and money the banks counted on isnt comming in. 40000 thousand people in housing market  unemployed  and we are just getting started, the banks got greedy thats what happened.

It sounds like Tony M just repeated what i said but he didnt tell u why the realestate bubble busted is because the banks got greedy and wouldnt offer a fixed low rate anymore.

Answer 2

IndyMac was a high risk lender in the mortgage business.  When the real estate bubble collapsed they lost a lot of money on homeowners who could not pay their mortgages. Subsequently Senator Schumer in DC made a statement that they were in trouble and many people who banked with Indymac withdrew their money and the company became insolvent.  The FDIC had to bail them out because they did not enough money to cover their depositors withdrawals.