Answers to common questions about the mortgage crisis

Elsa wants to know whether mortgage problems could jeopardize bank deposits. “I’m especially concerned about Countrywide’s stability in light of their heavy involvement in this market,” she writes. “I realize that Countrywide has a bank and a mortgage company.

Are they in any way connected? If (the mortgage company) goes into bankruptcy, are the funds in the bank in jeopardy? I’m seriously considering closing my accounts with them.” Countrywide Financial is a holding company for various businesses, including Countrywide Bank, a federal savings bank insured by the Federal Deposit Insurance Corp. Countrywide also owns an unregulated mortgage finance company. Both subsidiaries are involved in home loans.

Countrywide did not return repeated phone calls to discuss this question. The Office of Thrift Supervision, which oversees Countrywide Bank, “can’t make comments about companies we regulate,” says Kevin Petrasic, its managing director of external affairs.

Petrasic pointed out that as of June 30, the bank met the definition of well capitalized, “which means that it meets the highest capital level that is in place for depository institutions.” On Thursday, Countrywide Financial said in its second-quarter report that the debt and secondary-mortgage markets, upon which it depends for financing, are “experiencing unprecedented disruptions, which could have an adverse impact on the company’s earnings and financial condition, particularly in the short term.” On Wednesday, shares in the holding company fell 13 percent after a Merrill Lynch analyst recommended selling the stock and said bankruptcy was possible. It’s not clear whether problems with the parent company will jeopardize the bank. However, no matter what happens, deposits in Countrywide Bank will be insured - within limits - by the FDIC. The basic insurance is $100,000 per depositor per bank. Depositors can get additional insurance by opening different types of accounts, such as individual retirement accounts, which are insured separately up to $250,000 per depositor per bank. “When an institution gets into financial difficulty, we’ll step in to protect insured depositors,” says David Barr, a spokesman for the FDIC. “We try and put together a merger with a healthy institution. A bank could be closed on a Friday, and on Monday morning it’s opening as a branch of another bank. For the average customer, it’s business as usual. The insured portion (of your deposits) will be made available immediately.” If a bank fails and you have uninsured deposits, you become its creditor. As the FDIC sells bank assets, you could receive all or some of your uninsured deposits. If Evelyn has more than $100,000 at Countrywide or any other bank, she should find out whether her accounts are fully insured by using the electronic deposit insurance estimator at or calling (877) 275-3342. Uninsured deposits at any bank or thrift should be moved to a different FDIC-insured institution.