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I realize the news reports all seem to make it look as though these failing financial institutions were all spending their time defrauding each other and their investors, bilking innocent unwed mothers out of their savings, and stealing houses. Clearly that doesn't tell the whole story, because our experience with IndyMac has been positive.
I can't speak for anyone else but I can say that my own mortgage is a very normal "Fixed Rate" that is quite low and has no unusual fees associated with it. When we added on to the house, IndyMac was very easy to work with. They established a construction loan that automatically rolled over into a normal mortgage as the work was completed. The rate was excellent, and was competitive with any local bank for both the construction loan and the mortgage -- but they were the most flexible in making it a one step process.
There wasn't anything strange about the financing either. At the time we did the work, we had a professional assess the value of the house based on completion of the planned work so that we knew in advance we wouldn't be taking out a loan worth anywhere close to being more than the value of the house. Its been six years now, and the value of the house has gone up even as the debt we have on it has gone down. Barbara handles the home finances (she is an accountant after all) and has always put extra money into the monthly payment so that we're now much further along toward paying off the house than we would otherwise be.
Today we read that the bank has failed and been taken over by the FDIC. The Federal Depository Insurance Corporation is a quasi-governmental agency that protects depositors assets. If you had money in an account with IndyMac, the FDIC guarantees up to $100,000 of it.
I don't have money in an account at IndyMac. I owe them money. It is the only significant debt that Barb & I have -- our home mortgage. Do I get to stop paying them? Of course not. The instructions at the FDIC's site indicate that we should simply keep making payments as usual. I'm sure at some point our mortgage will be transferred and managed by some other financial institution. I would be surprised if IndyMac even still owns the actual loan. More than likely they've been servicing it for someone else for some time.
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