Is Your Money Safe in Lubbock? - KCBD NewsChannel 11 Lubbock

7/15/08

Is Your Money Safe in Lubbock?

With banking and mortgage troubles all over the national headlines, NewsChannel 11 wanted to know if there is any reason for concern here on the South Plains.

Eric McDonald is the Chief Investment Officer for McDonald Capital Management.  His job centers on the financial world, which recently had a few upsets. "Now obviously if somebody is worried about a bank failing like IndyMac people are ready to get their money out," said McDonald. 

With such high profile financial institutions having problems, it's easy to wonder if this could happen at your local bank. "There is concern, the national press would cause anybody concern when you see on television people lined up at their bank," said First Bank & Trust Chairman and CEO Barry Orr.

McDonald doubts Lubbock will see any problems. He said, "Lubbock has been very steady and so we haven't seen home prices double or triple like in some of these markets, so I would say that our risk level is extremely low of any kind of big problem."

If you're still worried, McDonald says to make sure you don't put more money into any one bank than the FDIC insures, which is $100,000. "If you're a bank depositor the Federal Deposit Insurance Corporation insures up to $100,000 per person in a bank. I know some of the IndyMac depositors were told that they could have multiple accounts as long as they were below $100,000. Well, if it is the same person that counts against your $100,000. So if it's different people you're guaranteed up to $100,000 in security, so if you're really worried about a bank, you know, keep $99,000 in the bank." said McDonald.

McDonald also said he doubts Lubbock will see any impact from the banking crisis, but he did say in the future banks may be more careful about giving out major loans like home mortgages. You'll still be able to get a 30 year mortgage loan, but you may need to provide more proof you can afford the loan or pay a higher down payment.

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