Worried About Foreclosure? Hope That Your Bank Implodes
July 15th, 2008Via: Wall Street Journal:
IndyMac Bancorp Inc., the failed thrift, reopened its doors under federal control Monday and promptly moved to toss ailing homeowners a lifeline by halting all foreclosures on the mortgages it owns.
Federal Deposit Insurance Corp. Chairman Sheila Bair, who has been one of the most outspoken officials calling for banks to ease up on struggling homeowners, said that the agency is “really focused” on keeping borrowers in their homes for both their sakes and to maximize IndyMac’s value for taxpayers. “We will very aggressively pursue loan-modification strategies for unaffordable loans to make them affordable on a long-term, sustainable basis,” Ms. Bair said in an interview Monday.
The FDIC’s move came as hundreds of depositors lined up to withdraw funds at the branches of the thrift, now renamed IndyMac Federal Bank. At the thrift’s Santa Monica, Calif., branch, a line extended down the street and around the corner. Some people waited for hours to get their money at IndyMac’s Pasadena, Calif., headquarters, but the crowd remained orderly.
The FDIC typically insures as much as $100,000 per depositor, but nearly $1 billion of IndyMac’s roughly $19 billion in deposits was uninsured, affecting about 10,000 people, according to the FDIC. Officials have said they would be able to make 50% of customers’ uninsured funds available.
