IndyMac Bank - A scary lesson for everyone
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The failure of IndyMac bank is scary. It’s actually a scary lesson for all of us. You can read the full story at Wall Street Journal - Crisis deepens as Big Bank Fails. What caught my attention is the statement about what the bank specialized in. Here it is
It specialized in Alt-A loans, a type of mortgage that can be offered to borrowers who don’t fully document their incomes or assets
Just because something looks good on paper does not mean that it is good.
Think about it. Would you have deposited money in IndyMac bank if you knew that this was their specialization?
Scary. Very scary!
Those with multiple accounts under $100,000 are probably screwed. During the S & L mess I had a friend with three accounts each under $100,000 that totaled $230,000. She was reimbursed a total of $100,000. Those at the S & L assured her all the money was insured. There was another S & L across the street. She lobbied Congress to no avail.