IndyMac Bank, one of the nation’s largest savings and loans, went belly up on Friday. Big Daddy Uncle Sam is stepping in to help out, but it has people wondering if more banks could see the same fate.

IndyMac, with over $32 billion in assets, was a spin off of the infamous Countrywide Financial mortgage lender. It is the largest savings and loan in the Los Angeles area and also the 7th largest mortgage originator in the United States. And if you know anything about the state of the housing market and mortgages right now, that probably gives you a good indication as to why IndyMac failed. Things are just not looking good in the lending/paying back loans department right now.

IndyMac’s problems, in addition to the debacle over at FannieMae and FreddieMac, have cast a new light of distrust in the financial world.

This morning, many IndyMac customers lined up to try and get their life savings out of the bank.

According to a report in BusinessWeek today, one guy waited on line all night to emerge hours later with a check for $150,000. Probably not a good idea to get a check from a failing bank. If you can, take the straight cash, homie. (+ more after the jump)

As the bank is getting taken over by the Federal Deposit Insurance Corporation (FDIC), it will be increasingly difficult for customers to get their money out of their former branches. They will need to begin filing directly with the government agency.

A report in the New York Times is a little more ‘doomsday’ about the whole situation. Some analysts are predicting as many as 150 more small to mid-size banks will fail in the next 12 to 18 months.

So I guess it’s back to the ‘keep your money in the mattress’ scenario for some people? The government is taking action and claiming they will be able to insure everyone’s savings accounts for any failed banks, but there is no telling how long it will take to get your hands on that money. And isn’t that what this is all about anyway – liquidity? (banks being able to cover their loans and people like me being able to turn an ATM card into a couple of greenbacks for lunch)

Reuters: Who are Fannie Mae and Freddie Mac?, July 14, 2008
BusinessWeek: Customers Wait at IndyMac To Withdraw Money, July 14, 2008
New York Times: Analysts Say More Banks Will Fail, July 14, 2008