Tag Archives: FDIC

State and federal banking regulators shut down five institutions over the weekend - two in Georgia, two in Florida, and one in Michigan. This latest round of closings brings the number of bank failures to 34 for the 2011 calendar year. The largest of the closings was the Park Avenue Bank in Valdosta, Georgia, with $953.3 million in assets.

With no lender closings this weekend, the 2011 failed-bank tally holds at 34. By comparison, at this time in 2010, the year's failures stood at 57. Earlier this month, the FDIC updated its loss projections. The cost of FDIC-insured institution failures for the five-year period from 2011 through 2015 is expected to be $21 billion, compared to losses of $24 billion for banks that failed in 2010 alone. Market analysis conducted by Trepp LLC indicates that lenders are now taking the biggest hit from souring commercial real estate loans.

John McGeough and Anthony Lamacchia, founders of McGeough Lamacchia Realty Inc. traveled to Washington, D.C., last week to educate policy makers on the benefits of short sales. McGeough Lamacchia Realty is a full-service real estate firm in Waltham, Massachusetts, specializing in short sales. The company's two principals conducted meetings with officials at Capitol Hill, the FDIC, the U.S. Treasury, and the National Association of Realtors.

State and federal regulators closed the doors of six community-based lenders on Friday - two in Alabama, two in Georgia, and one each in Minnesota and Mississippi. This latest round of closings brings the total number of FDIC-insured bank failures to 34 for the year, and represents the most shut-downs in a single day since mid-December. Birmingham's Superior Bank was the largest of the closings and marks the first multi-billion dollar bank failure of 2011.

The retrospective foreclosure reviews mandated in the consent orders issued to servicers this week will help regulators evaluate the extent of the problem and determine the amount of monetary fines that should be assessed, according to John Walsh, head of the Office of the Comptroller of the Currency. Walsh says in addition to these punitive penalties, servicers will have to absorb ""substantial expense"" to fix their problems and are obligated to provide restitution to borrowers who suffered financial harm ""with no dollar cap.""

Federal regulators split from state attorneys general last week to cut their own deal with mortgage servicers as part of a settlement for the robo-signing mess that surfaced last fall. Critics of the side deal are calling for federal regulators to withdraw their agreements and work with the states to hold banks accountable. But even in the attorney general camp there has been dissension. A study released Tuesday by three economists says the original settlement proposal backed by state counsels could increase the foreclosure inventory by $297 billion.

After a two-week lull in which no banking institution was shuttered by regulators, the FDIC stepped in this weekend to seize Western Springs National Bank and Trust in Illinois and Nevada Commerce Bank headquartered in Las Vegas. The two closings bring the total number on the FDIC's failed bank list for the 2011 calendar year to 28. Bank failures have slowed recently. During the first quarter of this year, 27 insured banks went under. It's the lowest quarterly tally since the second quarter of 2009 when bad real estate loans were forcing near-record numbers to close their doors weekly.

Mortgage servicers have reportedly reached an agreement with federal regulators to change their foreclosure procedures as part of a settlement for the robo-signing transgressions that were uncovered last fall. The arrangement includes no fines, but monetary penalties have not been completely ruled out. In early March, federal regulatory agencies and state attorneys general together crafted a 27-page settlement proposal, however, the states have not been part of this latest development.

Federal regulators proposed a new rule Wednesday that would require certain financial institutions, including large mortgage lenders, to account for risk as they structure incentive compensation packages for executives and employees. New rules for risk-based pay are a mandate of the Dodd-Frank Reform Act and are aimed at stemming the type of risky lending and investment gambles that many economists say pushed the nation's financial system to the brink of collapse.

After two weeks of no bank failures, regulators stepped in to shut down one institution Friday evening - the Bank of Commerce in Wood Dale, Illinois. The closing brings the total number of bank failures during the first quarter of 2011 to 26. Wintrust Financial Corporation, headquartered in Lake Forest, Illinois, acquired the shuttered community bank in an FDIC-assisted transaction, making it part of the financial holding company's Advantage National Bank Group.