Wreck of IndyMac Sold for $13.9B

Feds seized Ill.-based Superior in 2001, but it continued to write, sell off bad loans

(NEWSER) - An Illinois bank seized by regulators in 2001 continued to write risky subprime mortgages for months after it was put under the day-to-day supervision of the Federal Deposit Insurance Corporation, the Wall Street Journal reports. Many of the loans—some with interest rates above 12%—have been foreclosed; a Texas bank that bought a portfolio of the loans is suing the government. More»

(NEWSER) - Alabama's Colonial Bank has collapsed in the sixth-biggest bank failure in American history, the Wall Street Journal reports. The lender, which had assets of $25 billion and 346 branches in five southern states, was an aggressive mortgage lender in overheated markets like Florida, and its failure will cost the FDIC $2.2 billion. Colonial's branches, deposits and remaining assets have been sold to Rival BB&T, and customers have been told to expect business as usual. More»

Depositors with more than $100K in the bank could be in trouble

(NEWSER) - IndyMac Bank's failure yesterday was a "wake-up call" to anyone with deposits above the $100,000 FDIC insurance limit, Terry Savage writes in Street.com. Americans have more than $2.6 trillion in uninsured accounts, and 10,000 depositors have more than $1 billion at risk at IndyMac alone. But before trying to rescue your money, learn how insurance applies to different kinds of accounts: More»

Senator's comments led to takeover, regulator says

(NEWSER) - As mortgage lenders Freddie Mac and Fannie Mae crowded the headlines today, Washington snatched up IndyMac Bank in the second-largest US bank failure in history, the Wall Street Journal reports. The Pasadena, Calif. savings and loan, which owns about $32 billion in assets, saw stocks fall from $45 last year to 28 cents this week as mortgage defaults piled up. It will reopen Monday under federal supervision. More»

FDIC hires extra staff to help with boost in 'problem' banks

(NEWSER) - Federal regulators are gearing up for as many as 100 bank failures in the next year—the most since the savings and loan crisis that saw more than 1,000 S&Ls go belly up in the ’80s and ’90s—as the subprime contagion continues to decimate the health of US financial institutions, reports the Wall Street Journal today. More»