Business News
Jul 12, 2008, 12:27 GMT
US mortgage bank IndyMac goes under, victim of credit crisis
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Older Talkback
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euroboy you spoke the absolute truth. Our nation teaches individualism and that is the problem. Everyone has this, it is about me attitude, who cares about anyone else. WAKE UP AMERICA IT IS NOT ALL ABOUT THE INDIVIDUAL BECAUSE WE WERE CREATED TO WORK TOGETHER FOR THE COMMON GOOD AND WHEN WE FORGET THIS OUR KINGDOM FALL JUST LIKE ALL THE OTHERS IN HISTORY.
re: ex loan officer - loan officers should have extensive classes on ethics? lol - it's called greed - as many people in this post have said. There's no class to teach you to not want to make maxxx $. I agree that everyone involved is culpible. The worst is yet to come...
While IMB was in dire straits, it could have survived but DEMOCRAT Senator Charles Schumer started the bank run for no reason at all. It was like shouting 'fire, fire, fire' in a movie theater.
An important angle in the IndyMac failure that may get lost in ominous headlines tonight and tomorrow: federal regulators pointedly cited U.S. Sen. Charles Schumer, D-N.Y., in explaining the bank's failure. In simple language, federal regulators blamed Schumer for a run on the bank.
Here's from the press release issued by IndyMac's regulator, the Office of Thrift Supervision: 'The OTS has determined that the current institution, IndyMac Bank, is unlikely to be able to meet continued depositors’ demands in the normal course of business and is therefore in an unsafe and unsound condition. The immediate cause of the closing was a deposit run that began and continued after the public release of a June 26 letter to the OTS and the FDIC from Senator Charles Schumer of New York. The letter expressed concerns about IndyMac’s viability. In the following 11 business days, depositors withdrew more than $1.3 billion from their accounts.
'This institution failed today due to a liquidity crisis,' OTS Director John Reich said. 'Although this institution was already in distress, I am troubled by any interference in the regulatory process.'
FDIC insures deposits not loans and is private for profit company (some of you may be duped into thinking its a government institution just like upu think of the FED) what does having a SS# or being able to pay the loan have to do with insuring your deposits. if you put the money in the bank regardless of the source and the bank says its insured then its suppose to be insured. get your facts straight.
People of America please wake up and start looking around and asking questions. Turn off the damn TV which just pollutes your minds.
Please stop being just dolls and slaves of the government.
This country will soon require a drastic measures to fix the situation and the powers that be are steering in that direction however if they do it they will do it the way they want it and there will be a tremendous transfer of wealth towards that group. If we as a country don't take action 80% of the population will end up as slaves LITERALLY (and we're almost there) 15% will be controlling the 80%, remaining 4% will be the administrators and 1% will be in power (again almost there).
God bless humanity
pray pray pray.
Ahum,don't panic guys,remember SP4 telling you your economy was going through the roof,thanks to Bush?Well then ???
Interesting, who is the source of this article. Ok, - moving on. If you have cash it's about time to change it into something of value. Unless, of course, you think confidence in paper will remain no matter what. Oh ya, Weimar Republik comes to mind. But those were the old days. Surely, this could not happen again at least not in the US of A. Look at the bright side everybody will be a paper millionaire. You can light each others last cigar. Gold, Silver who needs it!!!
Schumer should be stripped of all titles, political, and put on trial for causing this run on the bank. Sure the Bank was troubled, but potentially could have recovered. Were it not for Schumers political interference there would NOT have been a run on the bank.
I am not sure what his goal was other than panic the financial markets for political gain. This man has not served the people and hurt many.
So Gay people caused the Banking Crash? What the heck? No, I do not think so...I know of several people in the mortgage business who wrote bad paper and committed fraud. This has gone on in the insurance industry too...they all thrive on lack of 'Regulation...thanks President Reagan and the Republicans...' So sad, because when I was young and dumb I voted for the man. Good government and policies that protect the consumer involve regulation and oversight. Talk to your own Republicans in your state! I love California and Californias...but Reagan came from there!
While Senator Schumer points the blame at the OTC for “not doing its job,” I’d like to know why Senator Schumer was at a loss for words during the housing boom years of no doc loans, 110% financing, 1% Fed Funds rate, etc? As an elected official, Senator Schumer has a responsibility not to incite panic. The Senator’s words have adversely affected IndyMac employees and their families, individual and business customers, and shareholders. The entire US banking sector will be affected if the FDIC has to raise insurance fees to cover the estimated $4-8 billion cost to the FDIC’s insurance fund.1
Federal officials aren’t supposed to cause bank runs. In fact, much of the New Deal bank regulatory apparatus was set up for the purpose of eliminating such panics. When FDR was hit with a massive set of bank runs shortly after taking office, he gave an address in order to calm terrified depositors, assuring them that the banks would reopen shortly, and that everything would be fine. But Chuck Schumer is no FDR. He doesn’t stop bank runs; he starts them. Or, at least, has started one. The collapse of Indymac bank, the second largest bank failure in American history, began with a letter from the office of Senator Charles Schumer on June 27. He questioned the viability of the bank. When a senior senator who is in a number of influential posts regarding oversight of bank regulators directly attacks the confidence of a depository institution, it matters. Not surprisingly, the director of the Office of Thrift Supervision concluded that the collapse of the bank immediately following the Senator’s comments has not a coincidence. Director Reich concluded that Senator Schumer had ‘given the bank a heart attack’.
Why? Why would a federal official with enormous power, destroy an institution on which tens of thousands of depositors (not all of whom are insured) and employees depend? Why would a New York Senator attack a Pasadena bank, acting as some sort of amateur, self-appointed, long-distance bank examiner?
Perhaps this might help answer the question: Indymac has been under attack from the hard left. The Center for Responsible Lending issued an attack on Indymac within a few days of Schumer’s letter. CRL is part of a small army of left of center ‘research’ groups, community organizers, and public interest law firms who make their living accusing home lenders of racial redlining and predatory lending. On June 20th the Center accused Indymac of unfair practices regarding minority borrowers.
A suspicious person might think that a network of lefty attack groups proficient in bank bashing and frequently funded by trial lawyers and short-sellers, coordinated their activities with a law firm on the hunt and a Senator who works closely with the network.
On the other hand, maybe it is a coincidence that CRL and Sen. Schumer attacked the same bank in the same week. Maybe he didn’t know about the CRL report, nor CRL about his letter. Maybe the community group didn’t know about the trial-lawyer class action lawsuit which was launched against Indy a couple of weeks before all of this started.
Yeah, right.
The political class is shifting left. We’re likely to get Obama and Nancy and Harry running the most advanced economy in the world next year. The investor class doesn’t like what it sees coming. That’s why it is scaling back. Capital is going on strike, and we won’t come back to the table until we see that we have a chance to a fair deal.
In refence to the comment made blaming 'the illegals':
It is easy to blame everything on undocumented persons. That seems to be The American Way. Blame it on the immigrants - the problem here is all of us, with the exception of indigenous peoples of America, have roots elsewhere. The U.S., as we know it, has been built by immigrants from every continent.
According to a recent report concerning those affected the mortgage banking crisis, the 'bad' loans (Alt-A and Subprime) were made mostly to whites - at a 2:1 ratio over those made to Hispanics. The report also shows that the defaulted loans retain the same ratio.
Instead of blaming all societal difficulties and failures on immigrants - we should focus on deconstructing the American-embraced value of Greed. This is what drives an industry (led by individuals overcome with greed - it happens to the best of us) to exploit individuals with dreams of homeownership.
Loans were made to persons who truly could not afford these mortgages - but they were made anyway in the interest of profits. This unethical practice is what is currently being questioned by proposed legislation that will provide regulation via a standard of ethics in making loans.
People of various races, primarily whites, were preyed upon by an industry who could be satisfied by making loans to those who could afford them. Hence, the riskier category loans were established as a separate market. Don't you wonder why Countrywide (who owned IndyMac) cut its ties some time back?
The road to where we are today was a long one - one stemming from Enlightenment ideologies that have evolved and dictate our present day societal norms. We have to ask tough questions and take bold action to change the structures that have such a tight grip on us. One way is to establish a standard of how we do business in this country - in a way that pure capitalism can be embraced healthily without extremes - and without exploitation of the people it is supposed to benefit - all of us.
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