Calif. lender IndyMac seized by regulators; 1st big bank to close since '90s S&L crisis
Jul. 12, 2008 12:00 AM
Washington Post
WASHINGTON - Senior government officials prepared emergency steps Friday to rescue troubled mortgage giants Fannie Mae and Freddie Mac but stopped short after a campaign of public statements eased immediate concerns about the stability of the institutions.
But federal regulators were forced Friday to seize California-based IndyMac Bancorp after a run by depositors led to the second-largest failure ever of a U.S. financial institution. The bank, which was taken over by the Federal Deposit Insurance Corp., became the first major bank to shutter its doors since the savings-and-loan crisis of the early 1990s. IndyMac saw its holdings battered by the downturn in the housing market.
Similar troubles have battered Fannie Mae and Freddie Mac. With the companies' stock value draining away in recent days, Treasury Department and Federal Reserve officials have been discussing several options, including allowing the companies to swap some of their holdings in troubled securities for public money as well as accessing government loans, according to officials. Fannie Mae and Freddie Mac might also be allowed to tap an expanded line of credit from the Treasury.
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