Self-help guide for consumers

(Linda Stern is a freelance writer. Any opinions in the column are solely those of Ms. Stern. You can e-mail her at

lindastern@aol.com.)

By Linda Stern

WASHINGTON (Reuters) - Even one collapsing bank is one too many. The takeover by federal regulators of IndyMac Bank-- the fifth to fail this year -- was unsettling for savers and investors. And the Federal Deposit Insurance Corp. has close to 100 other banks on its watch list.

FDIC head Sheila Bair has moved to reassure consumers that she doesn't see further failures of banks as large as IndyMac -- the ninth biggest U.S. mortgage lender. But not all consumers are comforted. The recent earnings reports from big banks aren't helping: Wachovia lost $8.86 billion in one quarter. It could cost taxpayers as much as $25 billion to stabilize Freddie Mac and Fannie Mae. When Citicorp reported that it only lost $2.5 billion in the same quarter, Wall Street took that as a good sign. Sheesh.

Homeowners, savers and investors shouldn't feel bad if they are confused by it all. It's obvious the experts are confused, too, or they wouldn't be buying and selling bank stocks with such ferocity on alternative weekdays.

Nonetheless, consumers shouldn't depend strictly on the banking industry and its regulators to find a way out of the current mess. They should protect themselves, and perhaps even capitalize on current events. Here's how.

-- Fix your mortgage. Strongly consider refinancing now if you have a high interest rate mortgage or a subprime loan. Rates are low. If you're been making timely payments on your loan for at least two years, you could qualify for a better loan than you received initially. And since some crooked mortgage brokers were pushing subprimes on people who qualified for better loans in the first place, you may be able to get out of that loan now. If you're behind on your payments and worried about defaulting, try your best to hang on until October, even if you have to let other bills go unpaid. That's when the new housing bill now in Congress is expected to take effect. If you need help making it that far, look for a nonprofit mortgage counselor at the Department of Housing and Urban Development website, www.hud.gov.

-- Protect your savings. Do not exceed the FDIC insurance limits in any one bank. That means one person could get coverage for as much as $100,000, plus $250,000 in a retirement account, plus an additional $100,000 in joint accounts. If you really think you need more than that in a bank, find another bank to start putting cash into once you come close to those levels. Find more details at www.fdic.gov.