Washington Mutual's financial troubles – precipitated by a collapsed California housing market and the nation's economic downturn – have sent its stock plunging, its CEO packing and its future in doubt.
On Thursday, its stock briefly dropped below $2 a share on the New York Stock Exchange, before settling at $2.83.
What does it all mean for consumers and WaMu customers? Should they be concerned about their assets, mortgages or loans?
For answers and advice, The Bee talked to California Department of Corporations' Mark Leyes and Beth Mills of the California Bankers Association.
Should California banking customers be concerned about this recent news?
Beth Mills: I can't speak specifically to Washington Mutual, but the important thing overall for Californians to know is that banks are strong, safe and secure. Reserve funds are at or near all-time highs. Bank customers are protected by the FDIC (Federal Deposit Insurance Corp.) up to $100,000 and $250,000 for Individual Retirement Accounts (IRAs). The FDIC has $50 billion in assets available to depositors.
If you've got your money in a bank, your money's protected.
What if a customer has a mortgage with Washington Mutual?
Mark Leyes: If (the mortgage gets sold) and there's any kind of transfer, the bank needs to notify customers in advance. No one should be taken completely by surprise. But the terms of the mortgage shouldn't change. (Consumers) shouldn't worry that they're going to lose their house because Washington Mutual is having trouble financially.
On the flip side, don't think that because the bank may be having trouble that you'll get the home for free.
What should consumers be on the lookout for?
Leyes: Look for the information on your mortgage statement. Start there. Pay attention to letters and notification on changes in how to make your payment. I would be most concerned about anything in negotiation right now. If you're doing a loan modification, ask if the terms will continue to be valid.
Where can people get answers on their bank's financial health?
Mills: If customers have concerns or questions, they should ask their bank (officials). They're a resource to customers. You can also visit the FDIC's Web site (www.fdic.gov), which has a number of consumer-targeted pieces. And go to the California Bankers' Web site, www.calbankers.com. Overall, it's important to realize that there are safeguards in place. (Consumers) should feel confident.
(For an online ranking of banks, savings and loans and credit unions, based on safety and reliability, go to www.bankrate.com and search for "Safe & Sound" ratings.)
Call The Bee's Darrell Smith, (916) 321-1040.
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