Real Estate Blog

The turmoil in the financial markets caused by the housing bubble have created a long list of casualties with no end in site, the latest being IndyMac Bank which is the 3rd largest bank in US history to fail and Washington Mutual, along with over 150 other banks may be on the verge of failing. In times like these, you should know your Bank's Financial health.

For starters, go to the St Petersburg Times Web site at www.money.tampabay.com and click on the right hand side under "Your Bank's Health." You'll see Florida banks ranked by their financial condition. You can also click on http://www.tampabay.com/specials/2008/interactives/fdic-ratings/ for Florida bank ratings or http://www.tampabay.com/specials/2008/interactives/ncua-ratings/ for Credit Union ratings.

There's more information at www.bauerfinancial.com or www.bankrate.com, both services based in Florida.

You can also visit fdic.gov, or call toll-free 1-877-275-3342. The Web site includes a Failed Bank List, a list of member banks, and industry reports.

The two 'safest' places to have your money is JP Morgan Chase and Bank of America, the two largest banks in the US. These institutions can't fail... well, the FED can't let them fail. However, more importantly, you are only insured up to $100,000 per bank per person for savings, checking and CDs. If married, with joint accounts, each person's share up to $100,000 is insured. After that, God only knows!

Here's the FDIC insurance details:
http://www.fdic.gov/deposit/deposits/insuringdeposits/index.html

SPREAD YOUR ACCOUNTS OUT to different banks (the top 3 US banks preferably). Don't keep more than $100,000 per bank to be safe. Technically, you can have more through different accounts, here's a link -
http://www.bankofinternet.com/FDIC-Insurance.aspx

The scarier part here is that the FDIC has never truly been tested on a MASS financial crisis scale. I believe FDIC insurance coverage falls just under $60 billion total. The questionable part during this turmoil is what these Tier 1 capital reserve levels are that determine a bank's strength and solvency. A good percentage of that is based on shareholder equity ala the stock price. However, this is not based on current market stock prices but what the shareholders originally paid for the stock. Basically, as these banks drop in price, their solvency comes into question... and that there is the major problem. This is what happened with Bear Stearns... if it can happen with Bear Stearns, it can happen to almost anyone. Scary times, indeed...