IndyMac Bank seized by Federal regulators

Many want to pretend that the Mortgage Meltdown is over. They claim that the worst is over, and all is peaches and cream. But the reality is that the economic system is still adjusting. Now IndyMac Bank is being seized by regulators in the second-largest takeover in American history after a run on the bank by depositors.

The Federal Deposit Insurance Corp. will run a successor institution, IndyMac Federal Bank, starting next week, the Office of Thrift Supervision said in an e-mailed statement today. Customers will have access to funds this weekend via automated teller machines. Regulators intend to eventually sell the company.

The Pasadena, California-based lender specialized in so- called Alt-A mortgages, which didn't require borrowers to provide documentation on their incomes. IndyMac's home state, where Countrywide Financial Corp. was also located before it was bought last week, has been among the hardest hit by foreclosures.

Now is NOT a time for panic. Panic will only make things worse. Things will improve, but it is likely we will see a few more failures before we're truly on the far side of the Recession.