As discussed in a previous post, based on the total number of Americans with a credit score of 649 or lower, up to 35% of all Americans are effectively locked out of the refinance or purchase mortgage market for the foreseeable future (see One Third of All Americans Unqualified).  In the past, borrowers who did not meet the minimum credit and income criteria for a conforming [...]

August 31, 2010 – The latest FDIC Quarterly Banking Profile shows a 7% increase in the number of Problem Banks to 829 at June 30, 2010, up from 775 at March 31, 2010.   The number of problem banks is now at its highest level since March 1993 when there were 928.  More than 10% of all US banks are now classified as problem banks at risk of failure.  The FDIC insures deposits [...]

August 30, 2010 – In 2008, Fannie Mae and Freddie Mac were on the verge of failure after an unprecedented decline in housing values triggered a  subsequent wave of mortgage defaults.  To avoid the total collapse of these two mortgage giants, the Federal Housing Finance Authority (FHFA) placed Fannie Mae and Freddie Mac under conservatorship in September 2008. To “enhance [...]

August 28, 2010 – The newly released Delinquencies and Foreclosure report by the Mortgage Bankers Association (MBA) largely mirrors the Federal Reserve Bank of New York’s quarterly report on household debt and credit.  The mortgage delinquency rate for one to four unit residential properties decreased slightly to 9.85% and the percentage of loans in foreclosure during the [...]

The banking industry came close to collapse in 2008 as loan defaults surged and property values collapsed.  Government intervention and successful efforts to raise additional capital by major banks have since stabilized the banking industry, despite a record high level of delinquencies (see Consumers Delinquent on $1.3 Trillion Of Debt). Where we go from here is fiercely debated, [...]

August 27, 2010 – The FDIC today released a list of orders of administrative enforcement actions taken against banks, including 30 cease and desist consent orders. A cease and desist order is issued when the FDIC has “determined that it had reason to believe that the Bank engaged in unsafe or unsound banking practices and violations of law and/or regulations.” It [...]

When a banking failure occurs, the FDIC’s goal is to protect depositors and seamlessly arrange a transfer of deposits and a sale of assets to a healthy institution.  To enhance the attractiveness of a closed bank to a potential buyer and to reduce the FDIC’s immediate cash needs,  the FDIC has made extensive use of loss-share agreements (LSA) when a failed bank’s [...]

August 24, 2010 – According to research from Deutsche Bank, the number of Americans with credit scores below 600 has increased to 26% from only 15% prior to the start of the recession.  Further examination of credit data reveals that 9% of all Americans have a credit score in the 600-649 range. Based on current credit score requirements for a mortgage approval, any applicant [...]

August 23, 2010 – Banks nationwide have seen a staggering increase in delinquencies and nonperforming loans as the result of a severe economic recession and housing collapse.  Although delinquency rates and defaults are still at horrendous levels, the Federal Reserve Bank of New York’s quarterly report on household debt and credit offers hope that defaults may have [...]

August 22, 2010 – The latest week’s 8 banking failures brought the total for 2010 to 118 banks across 26 States.  The eight banks closed by regulators on August 20, 2010 were located in California, Illinois, Virginia and Florida.  The 8 banks closed by regulators along with their total assets and estimated loss to the FDIC Deposit Insurance Fund are listed below. FAILED [...]