Bank Collapse Watch: Three More Go Down

Downey Seized, Sold to U.S. Bancorp as Mortgage Fallout Spreads

Nov. 22 (Bloomberg) — Seizure and sale of Downey Financial Corp. and two smaller lenders may cost the FDIC more than $2 billion as foreclosures rise and home prices extend declines in the worst housing slump since the Great Depression.

U.S. Bancorp acquired Downey and smaller PFF Bank & Trust, California thrifts crippled by bad mortgages, yesterday in a deal brokered by the Federal Deposit Insurance Corp. Community Bank of Loganville, Georgia, was also closed and its $611.4 million of deposits taken over by Bank of Essex in Tappahannock, Virginia.

Regulators this year have closed the most banks since 1993 as mortgage defaults and tightening credit froze markets. The collapse of IndyMac Bancorp Inc. was among the biggest in history, costing the FDIC $8.9 billion. The agency expects Downey’s demise to deplete its Deposit Insurance Fund by $1.4 billion, with PFF costing $700 million and Community $240 million.

Emphasis added by me.

Whoa! Two biggies just went down. Number 8 and 11 on that list I always reference.

communitypfflistings

These closures weren’t announced until very late Friday (last night), just after I’d closed this blog. These announcements happen on Friday … but now the time is becoming later and later.

Of particular interest:

Downey was fourth biggest seller of option-ARMs, ahead of IndyMac and behind Wachovia, Washington Mutual and Countrywide Financial Corp., now part of Bank of America Corp.

Emphasis added by me.

Do we have a list of the others in the Top Ten of option-ARM sales?

Get the big picture. Read The Dimensions Of Our Doom.

Explore posts in the same categories: Bank Collapse Watch, C.O.A.T. - Belief, C.O.A.T. - Money, C.O.A.T. - Scams, C.O.A.T. - Self-Defense, Depression 2.0

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