Category
Bank Failures
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09.15.0816 percent of vintage ALT-A loans 60-days downFrom Bloomberg: Homeowners lured by low introductory rates to Alt-A mortgages, which typically require little or no proof of a borrower's income, may fuel the next wave of foreclosures and further delay a recovery from the worst housing decline since the 1930s. Almost 16 percent of securitized Alt-A loans issued since January 2006 are at least 60 days late, data compiled by Bloomberg show. Defaults will accelerate next year and continue through 2011 as these loans hit their three- and five-year reset periods, according to RealtyTrac Inc., an Irvine, California-based foreclosure data provider. ``Alt-A will be another headache,'' said T.J. Lim, the ...
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09.15.08Flameout on Wall StreetIn one weekend: Lehman Brothers: Bankrupt. Merrill Lynch: Sold to Bank of America. AIG: Massive Restructuring. And according to BoA: The financial system is facing unprecedented stress. 75/366 - Collapse, originally uploaded by Lily 0_0.
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09.12.08Time growing short for WaMu?Tick... Tick... Tick... Tick... Lighting a Smoke Bomb, originally uploaded by e20ci.
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09.08.08WaMu signs Memo of Understanding with OTSFrom CNN: Regulators have been in touch with Washington Mutual (WM). The Seattle thrift announced Monday that it entered into a memorandum of understanding with the Office of Thrift Supervision “concerning aspects of the bank’s operations, principally in several areas of its risk management and compliance functions, including its Bank Secrecy Act compliance program.” As part of the arrangement, WaMu has agreed to provide the regulators with “an updated, multi-year business plan and forecast for its earnings, asset quality, capital and business segment performance.” Make no bones about it, Washington Mutual, the largest U.S. savings and loan, is in trouble. Deep, ...
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09.08.08Washington Mutual ousts CEOFrom Bloomberg: Washington Mutual Inc., the biggest U.S. savings and loan, removed Kerry Killinger as chief executive officer after he failed to halt losses tied to home mortgages that caused an 88 percent slide in the lender's stock. Alan Fishman, 62, of Meridian Capital Group will replace Killinger, Seattle-based WaMu said in a statement today. The company said it reached an accord with regulators about improving the bank's operations without having to raise new capital. Killinger joins a growing list of casualties from the mortgage meltdown, and WaMu remains high in most bank-watcher's dead pools. Fishman has quite a task ahead of him ...
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09.06.08FDIC shuts down Silver StateFrom CNN: Regulators on Friday shut down Silver State Bank, saying the Nevada bank failed because of losses on soured loans, mainly in commercial real estate and land development. It was the 11th failure this year of a federally insured bank. Nevada regulators closed Silver State and the Federal Deposit Insurance Corp. was appointed receiver of the bank, based in Henderson, Nev. It had $2 billion in assets and $1.7 billion in deposits as of June 30. Interestingly, Andrew McCain, son of the current republican presidential candidate sat on the Board of Silver State until July. He was a member of the bank's audit ...
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09.02.08Option-ARMs dafults in death spiralFrom Housing Wire: Fitch Ratings on Tuesday released a wide-ranging look at option ARMs that paints a decidedly negative picture for the mortgage markets over the next 36 months. In fact, the picture is a downright scary one: the bottom line is that most outstanding neg-am mortgages won’t get out of 2011 alive, thanks to forced recasts. Fitch analysts said they now expect roughly $29 billion in option ARMs to recast to higher monthly payments by the end of 2009, and an additional $67 billion to recast in 2010; of this, approximately $53 billion is attributed to early recasts. “Though recent declines in ...
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09.01.08Trouble at WaMu?There's desperation in the air at Washington Mutual, and a 5 percent return on CDs to prove it. The lender, caught in the throes of the real estate meltdown, is currently offering a rate for certificates of deposit that is over twice that of the Fed Funds and discount rates. Desperate to attract money on deposit which then can be used to offset mortgage losses, a lender will often offer a much higher rate on depository accounts - in fact, it's a well-chronicled step in death-spiral financing. Countrywide did it. IndyMac did. And now Washington Mutual is. the 5% solution, originally uploaded ...
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08.27.08FDIC may borrow money from TreasuryFrom Reuters: Federal Deposit Insurance Corp (FDIC) might have to borrow money from the Treasury Department to see it through an expected wave of bank failures, the Wall Street Journal reported. The borrowing could be needed to cover short-term cash-flow pressures caused by reimbursing depositors immediately after the failure of a bank, the paper said. The borrowed money would be repaid once the assets of that failed bank are sold. "I would not rule out the possibility that at some point we may need to tap into (short-term) lines of credit with the Treasury for working capital, not to cover our losses," Chairman Sheila ...
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08.26.08List of problem banks growsFrom CNN: More banks are in trouble than just three months ago according to the FDIC. In its quarterly review of the nation's banking industry, the Federal Deposit Insurance Corp. reported Tuesday that the number of firms on its so-called "problem bank" list grew to 117 during the second quarter - its highest level since the middle of 2003. There were 90 banks on the problem list in the first quarter of this year. FDIC Chairman Sheila Bair expressed little surprise at the increase and warned that the number would grow. "More banks will come on the list as credit problems worsen and assets ...