Mortgage Companies that Went From Hero to Zero

When we work with banks and financial institutions, we would like to believe they have control and with protect some of the things we care for most, like our money and our belongings. While that is their mission as well, the economy faltered and they were affected negatively. These are some banks and auto companies that went from successful to failure in a short period of time. 

 

The Housing and Economic Recovery Act of 2008 was launched to take over Fannie Mac and Fannie Mae, both financially in control of millions of American’s home loans. They were faltering in the midst of the U.S. housing crisis that hit during that time. The government had to come and save them from disaster in hopes to correct the financial institution that has been around since the Great Depression. Ironically, it was created to assist during that horrible economic time and decades later was destroyed by the very same thing it was created to fix. Luckily for Fannie Mae, a record $11.6 billion was paid back to taxpayers in 2012 and their saving grace was very much worth it.

In the summer of 2008, more than nine percent of all U.S. mortgages were outstanding, either being in foreclosure or in delinquent status. One of the companies that suffered most from that time was Washington Mutual. They filed in September 2008 and nearly $180 billion in deposits were seized. They were completely sold to JPMorgan Chase for a measly $1.9 billion. The Federal Deposit Insurance Corporation, better known as the FDIC, has picked up the pieces for some of these failed banks since before the housing crisis.

One of the largest automobile producers in the world, General Motors, was saved by the government after their June 2009 filing. They are still owned partially by the Treasury Department, but their presence was returned to the public market in 2010. They cut thousands of jobs and closed plants, which worsened the blow for the already faltering Michigan. They received nearly sixty billion in financial aid, from the U.S. and neighboring countries such as Canada.

In 2008, Lehman Brothers filed the largest corporate bankruptcy in U.S. history. Their assets were nearly $691 billion and they were slowly picked apart by multiple companies. Their stock lost 73% of its value in the early part of 2008. Since Lehman Brothers had been given hundreds of billions of dollars from JPMorgan Chase, the Federal Reserve Bank of New York covered them for $138 billion after bankruptcy was filed. 

With offices all around the world and a strong international presence, Lehman Brothers was not only purchased and sold off, but was split into many parts all around the world. Most importantly with all of these financial failings, they hard earned money from supporting companies was just snatched away, leaving the business in a downfall, similar to the current statues of many financial institutions in the year 2008.

Looking for a reliable source for your housing financial needs? Contact a mortgage broker in Phoenix for assistance in dealing with your home loan.

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