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April 10, 2008

Washington Mutual to close?

A good friend of mine is in the banking/mortgage industry and sent me the following information:

Just a Heads Up !!!!

So we had our year end meeting with attorneys, investors, brokers, and our bankers just last week, and wrapped up today.

One of the things that stuck in my head from these meetings that I thought I would pass on to you all is:  As you all know the market is NOT at its best and will be getting even worse before getting any better.

Three Big mortgages banks and/or online firms have just gone under.  Due to bad mortgages, home loans, home equity loans & lines of credit, Washington Mutual will be closing out in 6 months or so. It may be taken over by other banks; the future is unclear at this point.

The big banks now will be B of A, Wells Fargo, City Bank, and Union Bank of California. ING Direct is still going strong and will be as told by our investor’s and banker’s. (We bank with 5 banks. Our stocks are held at Smith & Barney. Didn’t want you all to think we received this information from just one person in the industry.)

Use this information as you wish, the best thing for you to do now is to start looking into other banking institutes.

Good Luck!

I know how hard it is to deal with a bank being closed by the FDIC due to the massive defaulting of mortgages. I speak from the experience of having my former bank Netbank close in such a fashion. It’s a shock and while yes you’re insured by the FDIC to 100k, it’s hardly a consolation when you go to log on and see a public service announcement that your bank has been closed. While you might in time get to take your money out of the bank and/or gain your insurance money back, on the whole the experience is not one I’d recommend. It might behoove you to open up a second checking account in another bank outside of Washington Mutual as an additional backup.

I thought I’d pass this along to everyone, with the banking and mortgage industry being as volatile as it is at the moment, it might be beneficial to you, my savvy reader to look into the performance of WaMu as your bank.

~Kat

Filed under: Money Matters by Kat at 12:48 pm
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