June 29, 2010 – Anecdotal evidence has been suggesting for some time that many mortgage borrowers will deliberately chose to default when the mortgage exceeds the value of the property.   Empirical research released by the Federal Reserve Board now shows exactly how big a problem strategic mortgage defaults have become for the banking industry. The Federal Reserve study [...]

The Federal Deposit Insurance Corporation, the federal agency in charge of safeguarding the nation’s bank deposits, maintains a confidential Problem Bank List. This list contains the names of institutions that have weak capital positions caused by large loan losses or operational deficiencies that usually lead to failure.  The FDIC does not publicize the list for fear of causing [...]

June 25, 2010 – High Desert State Bank, Albuquerque, New Mexico became the nation’s 86th banking failure today as the New Mexico Financial Institutions Division closed the bank.  The failed bank was acquired by First American Bank, Artesia, New Mexico under an agreement with the FDIC acting as receiver. High Desert State Bank’s web site describes the bank as a [...]

June 25, 2010 – Troubled First National Bank, Savannah, Georgia, was closed today by the Comptroller of the Currency, which appointed the FDIC as receiver.  Failed First National was acquired by The Savannah Bank, N.A., Savannah, GA, in a purchase and assumption agreement with the FDIC.  All of First National’s deposits and “some” of the assets will be [...]

June 25, 2010 – Peninsula Bank, Englewood, Florida was closed today by the Florida Division of Financial Institutions, which appointed the FDIC as receiver.  Florida now leads the nation with 14 banking failures.  Illinois is a close second with 12 banking failures and Georgia has a total of 9. Peninsula Bank was acquired by Premier American Bank, National Association, Miami, [...]

Mortgage Delinquencies and Foreclosures Continue To Soar The record high rate of mortgage delinquencies and foreclosures remains the banking industry’s biggest obstacle towards financial recovery.  The horrific statistics for the first quarter on mortgage defaults provides little reason to believe that the housing crisis will end anytime soon. The delinquency rate for all [...]

June 24, 2010 – Commercial and multifamily delinquencies continued to increase in the first quarter of 2010 according to a report by the Mortgage Bankers Association. According to Jamie Woodwell, MBA’s Vice President of Commercial Real Estate Research, “Weakness in the economy has continued to weigh on commercial properties, which in turn weighs on the mortgages [...]

June 23, 2010 – Borrowers who chose to default on mortgages that they are capable of paying will be facing a long wait before they are able to own a home again under new Fannie Mae guidelines.  The new rules come at a time when considerable attention is being focused on “strategic defaults” in which a borrower determines that it is no longer in his financial interest [...]

June 23, 2010 – As expected, the Federal Reserve left interest rates unchanged at the end of a two day policy meeting.  Citing financial turmoil in Europe and restrained economic growth at home, the Federal Open Market Committee (FOMC) voted to maintain the Fed funds rate near zero.  The Fed funds rate has now been between zero and .25% for a year and a half. Forecasters [...]

June 22, 2010 – The FDIC Board of Directors extended the Transaction Account Guarantee  (TAG) program six months beyond its original expiration to December 31, 2010.   In addition, the Board approved for an additional extension, if deemed necessary, to December 31, 2011. The TAG program was initiated in October 2008 as part of the Temporary Liquidity Guarantee Program (TLGP) [...]