Another One Bites the Dust

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Housing Woes Shake Bank in California

"The financial crisis threatened to claim its first casualty in the U.S. banking industry, as federal and state regulators gave a rare directive to Fremont General Corp. to shore up its operations immediately.

While the California lender's woes don't pose a threat to the broader financial system, its plight marks a new stage in the turmoil that began last summer. Regulators said the Brea, Calif., company, parent of a once highly active subprime lender called Fremont Investment & Loan, must raise new capital within the next 60 days or sell its banking subsidiary." WSJ 3/28

FDIC Directive

Note: If you have not met your daily dose of snarkasm, click here.
 
About Fremont General

"Fremont General Corporation is a financial services holding company with $8.8 billion in total assets, at September 30, 2007. The Company is engaged in deposit gathering through a retail branch network located in the coastal and Central Valley regions of Southern California and residential real estate mortgage servicing through its wholly-owned bank subsidiary, Fremont Investment & Loan. Fremont Investment & Loan funds its operations primarily through deposit accounts sourced through its 22 retail banking branches which are insured up to the maximum legal limit by the FDIC.

The Retail Banking Division of the Bank continues to offer a variety of savings and money market products as well as certificates of deposits across its 22 branch network. Customer deposits remain fully insured by the FDIC up to at least $100,000 and retirement accounts remain insured separately up to an additional $250,000..."
 
Will there be a run on the bank tomorrow ?

Orange County-based lenders that take deposits and are struggling include Brea's Fremont General, parent of Fremont Investment & Loan, and Newport Beach's Downey Financial, parent of Downey Savings. Others who have operations here and recently reported losses or profit declines include Pasadena-based Indymac Bancorpand Seattle-based Washington Mutual.

News: Banks teeter as credit crisis deepens | bank, fremont, fdic, deposits, loans - OCRegister.com
 
What's crazier--keeping a lot of cold hard cash at home or not keeping a lot of cold hard cash at home? Seriously. I'm strongly considering keeping a lot more cash around than normal.
 
FDIC has about $40b in reserves. I wonder how much of that $8.8B Fremont actually has, because 95% of the FDIC's reserves are presently in treasuries, which they would have to sell on the open market.

And the truly big question, what amount of credit default swaps are written with Fremont bonds as their underlying asset? Hmm-m-m-m.
 
Nothing under my mattress.

Got this under my bed though:

spas12.jpg
 
I used to close with Fremont, or its mtg division, not sure which. The broker was honest, but the qualification was fog a mirror. I used to look at the people and wonder how they would make the payments and still be able to afford a McD's hamburger and toothpaste. . None of them were neg am, but at least a few were adjustible.

We have a bit of cash in a stash, not much and a very few gold coins in a safety deposity box at WAMU. And a couple of 100oz silver bars. Wonder if I should take them out of the box. Ridiculous? What say you all?
 
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