Independent UK: World's largest mortgage providers teeter on the brink of collapse

[marmar]

World's largest mortgage providers teeter on the brink of collapse
By Guy Adams in Los Angeles and Margareta Pagano, Business Editor
Sunday, 13 July 2008




America's regulators were last night shoring up the country's financial defences, after one of the biggest bank failures in US history sparked fears about the viability of the world's largest mortgage providers.

The Northern Rock-style collapse of California's Indymac Bank, which had assets of $32bn (£16bn), came amid speculation that regulators are also preparing to step in to save the two federally-backed finance houses known as Fannie Mae and Freddie Mac, which together have commitments of $5 trillion, amounting to half of America's mortgage book.

Government officials closed down Indymac late on Friday, citing a massive run on deposits by worried customers. All 33 branches of the Pasadena-based bank closed three hours early, locking out hundreds of jittery investors hoping to withdraw their savings before it went under.

Amid chaotic and often angry scenes, it emerged that Indymac will reopen tomorrow as Indymac Federal Bank. According to a two-page notice taped to branch doors, it had been in an "unsafe and unsound condition" and was unable to meet continued demand by customers for their deposits. The Federal Deposit Insurance Corporation, a government regulator, will guarantee all deposits of up to $100,000 – a commitment that may nonetheless leave more than 10,000 savers out of pocket. .....(more)

The complete piece is at: http://www.independent.co.uk/news/business/news/worlds-largest-mortgage-providers-teeter-on-the-brink-of-collapse-866481.html

[enid602]

1. Buenos Aires

I'm in Argentina for 3 months, and witnessed a bank run here just Friday. Line of people stretching around the block.