More Banks Fail: Check To Make Sure You Are FDIC Insured
Two more national banks have failed. The Federal Deposit Insurance Corp. (FDIC) shut down First National Bank of Nevada and First Heritage Bank. Since these banks were FDIC insured, the money they contained was safe, and will be accessible to most account holders. The FDIC sold the accounts to the Bank of Omaha.
But this probably isn’t the end for bank failures. Bank failures are starting to come faster (but it is worth noting that none are as large as IndyMac). There are also some estimates that 100 banks will fail in the next year. However, reports BloggingStocks, 100 banks may be a rather optimistic number:
But, those estimates may be low. Bill Gross, an extremely prominent investor and head of Pimco, recently wrote that total losses related to the housing market will hit $1 trillion. About $450 billion of those write-downs have made it through the system. That leaves a potentially massive burden on the banking system going forward.
It is true that there is a massive burden on banks right now, but a lot of has to do with the downright speculative practices they have been involved in. Many of the banks failing at this time were involved in making questionable mortgages to people who might not have been able to really afford them.
But, on a whole, our banking system has a looooong way to go until it hits a place of complete failure, and we aren’t likely to get there. After all, even the wildest estimates don’t put this crisis as worse than the savings and loan disasters of the 1980s.
The key is to avoid panic. Double check to make sure your bank is FDIC insured. Then look at your accounts. The FDIC will guarantee your money up to $100,000 per deposit account ($200,000 if there are two depositors) and $250,000 per retirement account. If you have more than the insured amount in an account, consider moving some of that money to another bank. But withdrawing it all as part of a “run on the bank” policy will only make matters worse.
Tags: banks fail, FDIC, home mortgage loan, mortgage lenders,
mortgage loan blog, IndyMac, bank accounts
July 26th, 2008 at 9:35 am
[…] Indeed, lower oil prices have also been helping the US dollar as well. Generally good economic news has been providing a measure of support, and there is hope for a rally in the stock market, despite the latest national bank failures. […]