What happens when a new bank takes over

The FDIC closes a bank, offers that bank for sale, finds a buyer and agrees to cover some of the losses that the buyer incurs. That's how it works when your bank goes under.

But, what happens after you become a loan customer of the new bank? Is it all peaches and cream? Not necessarily so.

According to a report on CharlotteObserver.com, banks often put roadblocks in front of their borrowers and either hound them to pay off  their loans or face foreclosure.  One borrower wouldn't roll over and took the bank to court.  It WON!

Read the full story here.

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dba Vested Land Services LLC

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FDIC shutters 5 banks. Total for year 39

More bank closings.

Regulators have shut down a total of five banks in Florida, Georgia and Michigan, lifting the number of U.S. bank failures this year to 39. That follows157 bank closures in 2010 in a limping economy and mounting soured loans.

The Federal Deposit Insurance Corp. on Friday seized the banks: First National Bank of Central Florida, based in Winter Park, Fla., with $352 million in assets; Cortez Community Bank of Brooksville, Fla., with $70.9 million in assets; First Choice Community Bank of Dallas, Ga., with $308.5 million in assets; Park Avenue Bank, based in Valdosta, Ga., with $953.3 million in assets; and Community Central Bank in Mount Clemens, Mich., with $476.3 million in assets.

Read on-line: 5 banks fail in Fla., Ga., Mich.; makes 39 in '11 - BusinessWeek

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Stephen M. Flatow, Esq.

Stephen's Title Agency, LLC

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E-mail Stephenstitle AT comcast.net - www.stephenstitle.com

FDIC Shuts Four Banks; 18 In 2011

The FDIC marches on in its closing of failing banks. The newest banks, none in New Jersey, were closed during the week of February 7, 2010.

Read the full article. Regulators Shut Four Banks; Failure Toll Rises To 18 In 2011

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Stephen M. Flatow, Esq.

Stephen's Title Agency, LLC

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Fairfield, NJ 07004

Tel 973-227-4724 - Fax 973-556-1628

E-mail Stephenstitle AT comcast.net - www.stephenstitle.com

FDIC bank closures - and they're off!

The FDIC announced the closing of three banks this week, raising the total this year to 14.  While the banks are located in Georgia and Illnois, they are of the so-called "community bank" family.  They're banks that, well, get their money from folks in their operating neighborhood and lend it likewise.

Commercial loans are the bane of community banks.  A problem with a large loan or one given to a start-up business is quick to have an impact on the bank's financial operations.

Read the full report from the New York Times, Regulators Close 3 Failed Banks in Georgia and Illinois.

For your next title order or

if you have questions about what you see here, contact

Stephen M. Flatow, Esq.

Stephen's Title Agency, LLC

165 Passaic Avenue, Suite 101

Fairfield, NJ 07004

Tel 973-227-4724 - Fax 973-556-1628

E-mail Stephenstitle AT comcast.net - www.stephenstitle.com

157 bank failures in 2010

Deposits.com reports on bank closures for 2010.

This year ended with 157 bank closures which was 17 more than failed last year. The number bank failures grew considerably when the financial crisis began in 2008. The number of failures went from 3 in 2007 to 25 in 2008. It's hard for me to remember the days before 2008 when bank failures were rare.

Depositors with large savings have a little less to worry about in terms of bank failures. The FDIC $250K coverage limit became permanent when the Dodd-Frank Wall Street Reform and Consumer Protection Act became law in July. This same coverage limit also applies to NCUA-insured credit unions.

The higher coverage limit was nice, but it didn't make a difference for the vast majority of bank failures this year. In these cases the FDIC was able to find buyers for the failed banks that assumed all regular deposits.

So, what's the impact on consumer depositors?

The main issue for depositors when banks fail is the loss of the high interest rate on their existing CDs. By law the acquiring banks are allowed to lower the interest rates on existing CDs. Many of the acquiring banks did make use of this allowance. The depositors are free to close the CDs without a penalty, but in today's interest rate environment, it's impossible to replace those CDs with new ones with the same high rates.

Here's to a better 2011! Read the full report, Review of the 2010 Bank Failures and Their Effects on Depositors

div align="center">For your next title order or

if you have questions about what you see here, contact

Stephen M. Flatow, Esq.

Stephen's Title Agency, LLC

165 Passaic Avenue, Suite 101

Fairfield, NJ 07004

Tel 973-227-4724 - Fax 973-556-1628

E-mail Stephen@stephenstitle.com - www.stephenstitle.com

When was the last time you got a bargain?

When did you last enter into a transaction where you a) got a steep discount on the price and b) the seller provided 100% financing? Well, read this story about the FDIC sales of two mortgage portfolios.

Real Money: The FDIC Sells Four Loan Portfolios Totaling $1.22 Bil.

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Stephen M. Flatow, Esq.

Stephen's Title Agency, LLC

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Fairfield, NJ 07004

Tel 973-227-4724 - Fax 973-556-1628

E-mail Stephenstitle AT comcast.net - www.stephenstitle.com

FDIC closes three banks – total to date is 146

Reuters reports that FDIC regulators closed three banks in the United States on Friday, November 12, 2010. This brings the number of closures in 2010 to 146.

“The Federal Deposit Insurance Corp has said it expects bank closures to peak this year after 140 closures in 2009. The bulk of this year's closures have been smaller institutions, each with less than a billion dollars in assets.”

“FDIC Chairman Sheila Bair said recently that while the number of failures will exceed last year's tally, the total assets of this year's failures will likely be lower.”

The weak link in the American banking world appears to be community banks as “their recovery has lagged behind that of larger institutions and the broader economy.” These banks are susceptible to the problems in the commercial real estate market because they have “higher concentrations” in these loans than bigger banks.

Read the full Reuters report.

For your next title order or

if you have questions about what you see here, contact

Stephen M. Flatow, Esq.

Stephen's Title Agency, LLC

165 Passaic Avenue, Suite 101

Fairfield, NJ 07004

Tel 973-227-4724 - Fax 973-556-1628

E-mail Stephenstitle AT comcast.net - www.stephenstitle.com

FDIC floats rules on when they’ll close financial firms

A story by Deborah Solomon in the Wall Street Journal covers an FDIC proposal that will let financial creditors take the hit when a financial firm must be closed “but left wiggle room for the U.S. to make payments to certain types of creditors.”

“The proposal is the first step in the government's effort to clarify how it will seize and dismantle large financial firms that run into trouble. The Federal Deposit Insurance Corp. was given authority to liquidate firms as part of the U.S. effort to prevent another collapse like that of Lehman Brothers, whose demise rippled through the financial sector.”

The FDIC is taking the action at the same time that regulators in other countries are addressing the so-called “too big to fail” firms and banks.

What’s the FDIC considering? As a first step

it planned to prohibit additional payments to shareholders and long-term debtholders in the event of a firm's demise. The FDIC said it could make additional payments to certain short-term creditors in situations where it maintains "essential operations" or to "minimize losses and maximize recoveries."

The proposed rule has been put out for comment. We’ll keep you posted.

By the way, three more banks recently failed.

Here’s the WSJ story.

For your next title order or

if you have questions about what you see here, contact

Stephen M. Flatow, Esq.

Stephen's Title Agency, LLC

165 Passaic Avenue, Suite 101

Fairfield, NJ 07004

Tel 973-227-4724 - Fax 973-556-1628

E-mail Stephenstitle AT comcast.net - www.stephenstitle.com

The FDIC strikes back

The FDIC has announced it will be filing lawsuits alleging negligence by bank officers at several closed banks, the Washington Post reports. It’s about time.

“The Federal Deposit Insurance Corp. has authorized lawsuits against more than 50 executives at failed banks across the country in an attempt to recover more than $1 billion of the agency's losses during the credit crisis.

“More than 50 bank officers and directors were negligent, committed fraud or otherwise breached their duties and are, therefore, legally liable, the FDIC concluded after lengthy investigations into the first wave of bank failures.”

The FDIC has paid our over $75 billion since 2008 in connection with bank failures. Previous recovery efforts in the late 1980s were successful.

"These investigations are now beginning to produce results, and we anticipate that many more will be authorized," FDIC Chairman Sheila C. Bair said in a statement Friday evening. "As a matter of policy, the FDIC believes strongly in accountability for directors and officers whose personal misconduct led to a bank's failure."

Only one lawsuit has been filed so far against officers of IndyMac Bank.

I hope we see more.

Read the full story.

For your next title order or

if you have questions about what you see here, contact

Stephen M. Flatow, Esq.

Stephen's Title Agency, LLC

165 Passaic Avenue, Suite 101

Fairfield, NJ 07004

Tel 973-227-4724 - Fax 973-556-1628

E-mail Stephenstitle AT comcast.net - www.stephenstitle.com

Two more banks fail; U.S. tally at 127 - MarketWatch

According to a report from Market Watch, the FDIC has closed two more banks bringing the total of closed banks to 127.  While the FDIC press releases are mum about underlying reasons for the bank's poor performance leading to its closing, it seems clear that the financial marketplace is not getting better.

Read the full report: Two more banks fail; U.S. tally at 127 - MarketWatch

For your next title order or

if you have questions about what you see here, contact

Stephen M. Flatow, Esq.

Stephen's Title Agency, LLC

165 Passaic Avenue, Suite 101

Fairfield, NJ 07004

Tel 973-227-4724 - Fax 973-556-1628

E-mail Stephenstitle AT comcast.net - www.stephenstitle.com

Thinking of a savings account? FDIC and NCUA insurance important considerations

There's one thing that we should remember when it comes to opening a savings account or any type of bank account - deposit insurance.

Here's an informative article from E-Wisdom.com that you should find helpful.

"Consumers may consider a number of options when picking a new savings account, including its yield and fees, especially as new federal regulations cause banks to look for different ways to make up losses.

"A recent report from U.S. News and World Report Money's Jim Wang noted there are a number of factors consumers may consider when looking at a new savings account.

"The first thing they should check is if the banking institution is insured by the Federal Deposit Insurance Corp. Credit unions should have backing from the National Credit Union Administration.

"FDIC and NCUA insurance protect up to $250,000 per depositor and if a financial institution doesn't have that protection, pass on it," Wang wrote. "There's no reason why you should put your savings in a bank that isn't insured."

"Interest rates are another factor, and banks may offer a promotional period that lasts a set amount of time. Wang said consumers should make sure the "post-teaser" level is comparable to other offers.

"Potential fees also present a concern and these charges may be connected to how much money is in an account. Some savings accounts, for example, require that a specified minimum balance be maintained to avoid a monthly fee."

Go to the website- FDIC and NCUA insurance important when considering savings accounts

For your next title order or

if you have questions about what you see here, contact

Stephen M. Flatow, Esq.

Stephen's Title Agency, LLC

165 Passaic Avenue, Suite 101

Fairfield, NJ 07004

Tel 973-227-4724 - Fax 973-556-1628

E-mail Stephenstitle AT comcast.net - www.stephenstitle.com

Is the FDIC letting the foxes get a second chance at the hen house?

From the Associated Press:

“The Federal Deposit Insurance Corp. took over ShoreBank, with $2.16 billion in assets and $1.54 billion in deposits. Urban Partnership Bank, the newly chartered financial institution, agreed to assume ShoreBank's deposits and nearly all its assets.”

ShoreBank was shut down by the FDIC on Friday.  It was long expected.  According to the Associated Press, the bank

“has been known for its social activism but racked by financial troubles in recent months. A consortium funded by several of the biggest U.S. financial firms is buying its assets and pledging to operate the new bank by the same principles.”

So, what’s so strange about this turn of events? 

In an unusual move, the FDIC allowed some of ShoreBank's executives to continue running the restructured bank. Executives who joined ShoreBank recently, as the bank struggled to raise capital, will manage Urban Partnership Bank. These managers "did not contribute to the bank's problems," the FDIC said.

Well, we’ll see if the FDIC is right about that or if this is just another case of insiders getting a second chance at the gold.

Read the full story here.

If you have questions about what you see here, contact 

Stephen M. Flatow 

Stephen's Title Agency, LLC 

StephensTitle@comcast.net

Forbes.com - FDIC Bags Five More Banks

Forbes.com is reporting that the nation has seen 108 banks closed this year by the FDIC.  Five more were closed at the end of July.

  As a result, The July failures drained the FDIC Deposit Insurance fund by $1.3 billion bringing the year-to-date total to $18.9 billion, well above the $15.33 billion prepaid assessments for all of 2010.

When will the takeovers cease or, at least, slow down?

Bank failures during “The Great Credit Crunch” began slowly as the FDIC only closed 25 banks during all of 2008. In 2009 the FDIC picked up the pace with 140 bank failures with a peak of 50 in the third quarter of 2009. So far in 2010 the FDIC closed 41 banks in the first quarter, another 45 in the second quarter, and so far 22 for the third quarter with two months to go.

The common denominator for weakness at the failed banks seems to be a high percent of non-residential and non-farm mortgage loans.  Construction and commercial loans did them in.

Yet, bank failures provide some good investing opportunities according to Richard Suttmeier, the Chief Market Strategist for ValuEngine.com.

Read the full report.

If you have questions about what you see here, contact 

Stephen M. Flatow 

Stephen's Title Agency, LLC 

StephensTitle@comcast.net 

973-556-1628 Fax

FDIC - 6 more banks closed this past week

In my opinion, one of the quieter aspects of the economy is the FDIC's closing of banks. There's just not a big hoopla when it happens and six more were shuttered this week.

As reported by the Morris County Daily Record's Associated Press Wire,

Regulators on Friday shut down three banks in Florida, two in South Carolina and one in Michigan, bringing to 96 the number of U.S. banks to succumb this year to the recession and mounting loan defaults.

The closures will cost the FDIC about $330 Million. That's not chump change. We're sure more banks will close before this recession is over.

Read the full article here.

If you have questions about what you see here,
contact Stephen M. Flatow
Stephen's Title Agency, LLC
StephensTitle@comcast.net
973-556-1628 Fax

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