Posted by
Sue on Wednesday, March 25, 2009 2:39:41 AM
I listened to the press conference. Okay, I was sort of listening to it. I noticed a few times that IndyMac Bank was brought up and was an example. He might want to look into this before he goes overboard with this success. The FDIC lost money and oh yes, the depositer did too! But hey, it is an example of government properly using authority.
Pressed again, Obama cited the Federal Deposit Insurance Corporation's handling of the IndyMac Bank as an example of government properly using its authority.
Since this was a highlight, lets talk about IndyMac Bank for a moment. Did you know that last Thursday the Federal Deposit Insurance Corp. (FDIC) has completed the sale of IndyMac Federal Bank FSB and on the deal, there was a loss of $10.7 billion dollars. Which by the way, the estimated losses were $8.7 billion, so they were higher.
The Federal Deposit Insurance Corp. said late Thursday that it has completed the sale of IndyMac Federal Bank FSB, the firm it took over last year, and that it took a $10.7 billion loss on the deal, far more than originally expected.
"As of January 31, 2009, IndyMac Federal had total assets of $23.5 billion and total deposits of $6.4 billion. OneWest has agreed to purchase all deposits and approximately $20.7 billion in assets at a discount of $4.7 billion. The FDIC will retain the remaining assets for later disposition," the FDIC said in a press release.
"As of January 31, 2009, IndyMac Federal had total assets of $23.5 billion and total deposits of $6.4 billion. OneWest has agreed to purchase all deposits and approximately $20.7 billion in assets at a discount of $4.7 billion. The FDIC will retain the remaining assets for later disposition," the FDIC said in a press release.
Last July in what at the time was the third largest bank failure in U.S. history, the government closed IndyMac, which had about $32.01 billion of total assets and only about $20 billion of deposits. At that time, the FDIC said, "Based on preliminary analysis, the estimated cost of the resolution to the Deposit Insurance Fund is between $4 and $8 billion."
Before its failure, IndyMac was a top-ten savings and loan institution and was one of the largest mortgage lenders in the U.S. But the housing crash took its toll on the company, and its shares fell 98% in the year before it closed.
Much of IndyMac's business was built on so-called Alt-A single-family mortgages, which were often made to borrowers with poor credit. As the secondary market for these loans collapsed, IndyMac's financial condition turned precarious. The company relied on securitization to sell many of the mortgages it originated. But when foreclosures started to surge, mortgage-backed securities dropped in value and investors became wary of buying new securitized pools of home loans.
And what about the depositers who lost money. This is from the OC Register back in February 2009.
If you've lost personal savings due to 2008's "IndyMac" savings and loan failure, you may want to get in touch with Cheryl Hodgson.
At Thursday morning's Community Civic Association session at Clubhouse 5, Hodgson spoke to residents not from a professional standpoint—she is a 20-year law enforcement veteran—but as a private citizen who suffered her own losses as a result of the IndyMac failure.
"I had just sold my home for $360,000 and I put my money in the bank," she told her audience. "But I was covered only up to $100,000." When it came to adding beneficiaries, she adds, restrictions allow only one's spouse and children. "My only family except for my brother is my 11-year-old son, but I was told not to list him as a beneficiary. If I had, I would have been insured for another $100,000."
Hodgson admits she did not entirely understand the process at the time. "Yes, I was wrong in not knowing insurance limits," she said. "I thought they [the IndyMac staff] were good people with my best interests at heart."
Last June when Hodgson, like so many investors, was feeling uneasy, she spoke with an IndyMac representative and was told not to worry. Then came the July 11, 2008 failure. This time Hodgson asked to speak with the manager. "She smirked at me and said, 'You should have had a financial advisor.'"
What Hodgson has since learned appalls her. "They were taking in bad loans and going after people on fixed incomes and people on disability. They knew these people couldn't afford their homes. Now they're foreclosing on them."
After reading in a newspaper article that one Laguna Woods resident lost over $600,000 in investments with IndyMac, Hodgson contacted The Village and asked if she could arrange a speaking date. Admitting that "I am not a banker, I'm a consumer," Hodgson adds that she wants to pass on what she has learned.
She also is hoping Village residents who've suffered similar losses will join her and a group of about 120 other IndyMac victims in drawing more attention to the matter. The group's website, http://indymacdepositors.com/index.htm, states their "primary goal is to secure reimbursement from federal authorities of insured an uninsured deposits that resulted from its seizure by the FDIC." Hodgson adds that "we also want some sort of law to protect consumers." She invites those who would like to network with her to call 949-283-0540.
Towards the end of the meeting Hodgson asked how many in the audience also had lost funds through IndyMac. About half of those present raised their hands. Others stated they were attending on behalf of family members who had dealt with IndyMac.
"I'm here and I will donate my time to writing letters and getting you into our Google group," Hodgson told them. "I've opened up a case with my congressman and I will help you do so with your congressman. I can't promise anything, but I am going to fight tooth and nail."