Message to Loan Industry: “Clarence! Get me back!”
George Bailey suffered his Savings & Loan breakdown when his Uncle Billy stopped at a bar on the way to make a bank deposit and mean Mr. Potter took the money bag. Of course, it’s never a good idea to stop for a strong drink while carrying large sums of business cash and rightfully George was might angry when he yelled at Uncle Billy, “Where’s that money, you silly stupid old fool? Where’s that money? Do you realize what this means? It means bankruptcy and scandal and prison. That’s what it means. One of us is going to jail - well, it’s not gonna be me.”
George then went for a drink himself and decided he’d rather jump off a bridge than to go to prison. Thankfully that plan didn’t work out.
But one scene in the movie reminds me of the article I read this morning about IndyMac being seized by Federal regulators… the scene where depositors make a run on the bank to get their money before it closes down. George reasons with the mob and eventually manages to keep the door open. The article says,
The banking regulator said it closed IndyMac after customers began a run on the lender following the June 26 release of a letter by Sen. Charles Schumer, D-N.Y., urging several bank regulatory agencies that they take steps to prevent IndyMac’s collapse. In the 11 days that followed the letter’s release, depositors took out more than $1.3 billion, regulators said.
This run and subsequent takeover by the government, occurring at the same time as the rumors about Freddie Mac and Fannie Mae being in trouble, caused the stock market to hiccup convulse yesterday.
While I’m longing for Clarence to take me back to the days of the boom real estate market, I understand the reality that this could be years away. Meanwhile, the mortgage page of Banks.Com will be closely watching developments.
Indeed, the two government chartered companies had enough freedom to become the largest buyers of home mortgage loans — and expose themselves to what became the subprime mortgage crash. And now, despite the rosy outlook of several people over the last few months that the worst was over, serious talks are underway about what might happen if Fannie Mae and Freddie Mac actually fail.
As a Realtor, I can only put trust and faith in our powerful nation that we’ll find the financial strength and courage to overcome these dark, scary times.
