Deposit Insurance Fund may be wiped out

Posted by Anthony Landaeta Jr 9/15/08

Washington Mutual Inc., the biggest U.S. savings and loan, had its credit rating cut to junk by S & P because of the deteriorating housing market. WaMu was one of the biggest lenders pushing option arms programs where the borrower would only have to pay 50% of the mortgage payment with the other 50% going to the outstanding balance of the Mortgage.
Because of the last Government takeover of Indy Mac Bank FDIC’s Deposit Insurance Fund only has $45 billion of assets. With the downgrade of WaMu and its $140 billion of insured deposits, the Deposit Insurance Fund may be wiped out by WaMu’s failure.