WARNING: IndyMac appears close to collapse

Just called FDIC claims agent since I have over 100k in 2 of my CDs. She said she can fix an appointment on phone or I can goto local branch here ( Pasadena and Burbank ) on monday and close my CDs. Since I have a joint acct she told me to take my wife too with me ...

According to this, Indymac Bank was "the second largest financial institution to close in U.S. history".

i wonder who's up next? the thing is we need to make sure we don't put it on that bank. fdic reserves could dry up if more banks fold and it may become harder to get back our insured deposits.

I have 400k, 200k is not insured. They cut me a check on Thurs and I deposited into another bank, but there's a 5 days hold on the check.. Will the fund cleared in 5 days, or i'm in deep sh*t?

scripta said: I'm not sure you meant to quote my post... but it doesn't answer my question.

Since they're now running the bank "business as usual," I'm guessing they'll allow deposits. At some point within 2 years they can either close the bank or sell it to someone else. But until that happens, are all deposits fully guaranteed without the usual FDIC limit?Yes, the FDIC insurance extends to the new bank. It's business as usual in that sense.

The FDIC will get someone else to take over IMB soon...it's just a matter of sweeting the deal to make IMB attractive. No way will it take years...or even a year.

These failures early in the collapse will be well handled, in the sense that the FDIC will ensure that a more stable institution takes over ASAP. Eventually, there's going to be a need for something like the RTC we saw in the 90's. The scope of this banking collapse is too big for the FDIC to handle by the book.

According to the FDIC takeover site -

<<<If you have more than $100,000 in your account, or if the total of your related accounts exceeds $100,000, your accounts may require review by an FDIC Claim Agent and you should call the FDIC to schedule an appointment with an FDIC claim Agent. The FDIC will pay uninsured depositors an advance dividend of 50% of your uninsured deposit.>>>

I called and the agent told me that at least 50% of all uninsured bank funds will be returned to the customer. The remaining 50% will be distributed proportionately to account holders after liquidating all of Indymac's assets. So it looks like the worst case would be that you would lose only lose 50% of uninsured funds.

On another note, I set up my account as a POD (revocable trust) with three beneficiaries so I should be insured up to $300,000. However, I set up the CD as a POD and when the CD matured, I transferred the funds into a First Rate Money Market Checking account over the phone. Can Indymac transfer the funds into an account WITHOUT carrying over the POD status? In which case the FDIC coverage would only be $100K (if the new account was set up as a sole account holder). Because no action was required to transfer the funds from the matured CD to the First Rate Money Market account, I'm a bit concerned that the person that did the transfer dropped the ball and did not roll the account over as a POD. Pardon my ignorance, but is this even possible? Could an Indymac agent roll one account over to another type of account without adhering to the original account's setup? Wouldn't I have to sign something to change the status of a POD account?

mnsweeps said: Just called FDIC claims agent since I have over 100k in 2 of my CDs. She said she can fix an appointment on phone or I can goto local branch here ( Pasadena and Burbank ) on monday and close my CDs. Since I have a joint acct she told me to take my wife too with me ...

Oh wait....why should I close my 2 CDs? I will reopen a CD with the new Indymac Federal bank at the current higher rate and make sure with the FDIC claims agent that these 2 CDs are again FDIC insured as each will be over $100k ( but will have $200k insurance as I will title them joint and one with 2 beneficiaries )...

my question is will FDIC allow the new bank to give out the current higher rate?

Does this mean My CD stops accuring interest?? I am currently on a 5.75% 1yr CD and it doesn't expire till August 20 2008..
Or is interest paid out in full by the fdic .. Thanks...

Goldenlight said: Does this mean My CD stops accuring interest?? I am currently on a 5.75% 1yr CD and it doesn't expire till August 20 2008..
Or is interest paid out in full by the fdic .. Thanks...

11. Will I continue to earn interest at the same rate?
Yes, interest will continue to accrue at the contract rate on all non-broker deposits. If you deposited funds through a broker, the interest will accrue and be paid through Friday, July 11, 2008.

LINK

SweetCash said: According to this, Indymac Bank was "the second largest financial institution to close in U.S. history".Only if you ignore inflation. There were nearly as big ones that failed twenty years ago.

OK, now I'm really starting to freak out here. According to the FDIC site -

<<<The account title must include a commonly accepted term such as "payable-on-death," "in trust for," "as trustee for" or similar language to indicate the existence of a trust relationship. The term may be abbreviated (for example "POD," "ITF" or "ATF").>>>

None of my statements (either on my CD or the current First Rate Money Market Checking account) stated ITF, POD, ATF or anything. It just stated "CD" or "First Rate Money Market Checking account". But when I called the bank last week they confirmed the names of the three beneficiaries and that the account is insured to $300,000.

Are there any other Indymac account holders under POD status that also don't have the language in the account title? Is there any that DO have the language in the title?

dorani51 said: ThursdaysChild said: Thanks, Sen. Schumer for starting a run on IndyMac bank.

Regulators said the "immediate cause" of IndyMac's failure was a deposit run in recent days that began after a June 26 letter to the OTS and the FDIC from New York Senator Charles Schumer was made public. The letter voiced concerns about IndyMac's soundness.

By July 10, depositors had pulled more than $1.3 billion from their accounts, the OTS said in a statement.

"The institution failed today due to a liquidity crisis," said OTS Director John Reich. "Although this institution was already in distress, I am troubled by any interference in the regulatory process."

Schumer couldn't immediately be reached for comment late Friday.

Next news: Schumer is under investigation by SEC for shorting large amount of IndyMac stock.

Or: A call girl is under investigation by SEC for shorting large amount of IndyMac stock. There is an allegation that she has relationship with a powerful senator.

You don't say how large the check was or the time of day you deposited in the new bank. If it was after the 1430hours cutoff it goes on today's banking business. Which means that FDIC will look at your total deposits and say no. The bigger iffy situation is if you deposited before 1430 yesterday and then your new bank presented the check before the window closes. The 24 hour rule gives FDIC the option to refuse if the transfer is not in the "ordinary course of business" within the 24 hour time period after the check is presented. Typically a $2500 payment on your house/credit card so forth will be paid. A $25,000 check to you or a relative won't be. Given that the FDIC gave notice on solvency on Tuesday which shut down brokered funds your new bank probably will return the funds automatically if they are more than about $3-5,000. This is done to prevent depositors from receiving special treatment when it comes time to share loses. The courts call it a preference.

phatso888 said: I have 400k, 200k is not insured. They cut me a check on Thurs and I deposited into another bank, but there's a 5 days hold on the check.. Will the fund cleared in 5 days, or i'm in deep sh*t?Your check was the last straw. This is all your fault.

Just kidding. But not really.

hdpq said: Alright, now .. the bigger question is ... what do I do with the money that was in my IndyMac account? If FDIC keeps the rates competitive (doubtful), then I'd keep it there, else I'll probably move it back to Fidelity and stick it in the money market over there.

I was also thinking about that..

Do the minimum balances apply? I want to withdraw money from a ck acct that requires a min bal of $1000. If it falls below $1000, the original terms state that a $9/month fee applies.

does the FDIC honor the free IPOD?

Mnsweeps, did they ask you to bring proof of your beneficiaries’ relationship to you and to validate that the beneficiaries are still alive?

Thanks for the information mnsweeps. It looks like the accountholder’s declaration is enough, very interesting.

Why are you so anxious to close the CDs on Monday? Do you just want to be done with Indymac? Why not use the opportunity to shop around to see if better deals exist before closing the CDs?

The Countrywide guy.