Anxious customers jammed the phone lines and website of Countrywide Bank and crowded its branch offices to pull out their savings because of concerns about the financial problems of the mortgage lender that owns the bank.
The rush to withdraw money -- by depositors that included a former Los Angeles Kings star hockey player and an executive of a rival home-loan company -- came a day after fears arose that Countrywide Financial could file for bankruptcy protection because of a worsening credit crunch stemming from the sub-prime mortgage meltdown.
At a branch near Countrywide's corporate headquarters in Calabasas on Thursday, a flood of spooked customers seeking to withdraw their certificates of deposit and money-market accounts overwhelmed the small staff.
The Countrywide employees were forced to resort to taking down names and asking people to wait it out or come back later."I'm at the age where I can't afford to take the risk," a 69-year-old retiree who asked not to be identified said after transferring money out of his money market account. "I'll gladly put it back as soon as I know the storm is over."
After reading news reports of Countrywide's troubles, Elsie Ahrens of Calabasas decided to close two of her CD accounts at Countrywide."It's not worth it," said Ahrens, 42. "I don't think it's going to go under, but you never know."Ahrens, who runs a voice and data business, took her money and opened a new account at Bank of America, which she said felt more secure and offered a comparable interest rate.
In Laguna Niguel, Ashmore, the Impac Mortgage president, remarked on how the credit problems stemming from sub-prime loans had filtered down to a local bank branch."It started out with this global credit crunch we've been reading about," he said as another Countrywide depositor left the bank's office. "
It's now gotten down to affecting people like him and me who are closing our accounts."The other depositor shook his head as he climbed into his car."It's all over," he said, and drove away.
Thursday, August 16, 2007
Posted by Bakersfield Bubble at 11:25 PM