Two more US lenders bite the dust as loan defaults soar

[chafed_nut_sack420]

US BANKING regulators closed two lenders in California and Nevada two weeks after the collapse of IndyMac Bancorp, as loan defaults and foreclosures soar.

First National Bank of Nevada, with $US3.4 billion ($35.6 billion) in assets, and the Californian First Heritage Bank, with $US254 million, lacked sufficient capital, the Office of the Comptroller of the Currency said last week in a statement. Their deposits and some assets would be acquired by Mutual of Omaha Bank, the Federal Deposit Insurance Corporation said.

US bank failures have climbed to seven this year, as losses on loans and mortgages soar amid the worst housing market since the Depression. The Senate on Saturday passed legislation to stem foreclosures, which more than doubled in the second quarter from a year earlier, and prop up beleaguered mortgage-finance companies Fannie Mae and Freddie Mac.

"This is part of the wringing-out process that we need to go through," the Senate Banking Committee chairman, Christopher Dodd, said on Saturday in Washington after the Senate vote. "I would anticipate there will be some additional bank failures."

Regulators closed IndyMac, a Californian mortgage lender with more than $US19 billion in deposits, on July 11, in the third-largest federal bank seizure.

US lenders on the corporation's "problem list" grew to 90 in the first quarter from 76 in the fourth quarter of last year, the corporation said in May.

Mutual of Omaha will buy about $US200 million of assets and all deposits from First National and First Heritage, both owned by Arizona's First National Bank Holding Co. The banks' 28 offices in California, Nevada and Arizona will open today as Mutual of Omaha branches.

"We would first like to reassure all customers of First National Bank of Nevada and First Heritage Bank that all their deposits are safe and accessible," Mutual of Omaha bank's chief executive officer, Jeff Schmid, said in a statement.

Mutual of Omaha will pay the corporation a premium of 4.41 per cent to assume the deposits. The transactions may cost the deposit insurance fund $US862 million, the corporation said.

[benz]

US BANKING regulators closed two lenders in California and Nevada two weeks after the collapse of IndyMac Bancorp, as loan defaults and foreclosures soar.

First National Bank of Nevada, with $US3.4 billion ($35.6 billion) in assets, and the Californian First Heritage Bank, with $US254 million, lacked sufficient capital, the Office of the Comptroller of the Currency said last week in a statement. Their deposits and some assets would be acquired by Mutual of Omaha Bank, the Federal Deposit Insurance Corporation said.

US bank failures have climbed to seven this year, as losses on loans and mortgages soar amid the worst housing market since the Depression. The Senate on Saturday passed legislation to stem foreclosures, which more than doubled in the second quarter from a year earlier, and prop up beleaguered mortgage-finance companies Fannie Mae and Freddie Mac.

"This is part of the wringing-out process that we need to go through," the Senate Banking Committee chairman, Christopher Dodd, said on Saturday in Washington after the Senate vote. "I would anticipate there will be some additional bank failures."

Regulators closed IndyMac, a Californian mortgage lender with more than $US19 billion in deposits, on July 11, in the third-largest federal bank seizure.

US lenders on the corporation's "problem list" grew to 90 in the first quarter from 76 in the fourth quarter of last year, the corporation said in May.

Mutual of Omaha will buy about $US200 million of assets and all deposits from First National and First Heritage, both owned by Arizona's First National Bank Holding Co. The banks' 28 offices in California, Nevada and Arizona will open today as Mutual of Omaha branches.

"We would first like to reassure all customers of First National Bank of Nevada and First Heritage Bank that all their deposits are safe and accessible," Mutual of Omaha bank's chief executive officer, Jeff Schmid, said in a statement.

Mutual of Omaha will pay the corporation a premium of 4.41 per cent to assume the deposits. The transactions may cost the deposit insurance fund $US862 million, the corporation said.

Radovan karadzic would have fixed that

[JBGRAY]

I find it odd that Freddie Mac and Fannie Mae would be in as much trouble they'd be in, since they are able to duck a lot of the various regulatory procedures and fall into many gray areas....companies that don't get penalized to the degree that truly private enterprises would....and yet, they still tank.

I'm wondering what kind of effect, if any, had to do with banks and sub-prime lending agencies loaning money to more minorities(as well as non-citizens) to be more on par with their reflective US population percentage representation.  It's been a long-standing fact that black and hispanic credit scores were on average lower than their white and asian counterparts, so one would have to logically assume that blacks and hispanics wouldn't and shouldn't otherwise receive the same loan amounts.  Rather than try to fix the root causes of the problem, banks and other lending agencies, under tremendous pressure from the ACLU and other "civil rights" advocacy groups with their legions of lawyers, decided to lend more money to unqualified candidates.

Predatory lending I'm sure has had an even more devastating effect.  Shit, man, just getting a damn cell phone contract forces you to carefully read all that small print.  Many don't do any of that and just sign their name.  Mortgages, I'm sure, are much more complicated and I"m sure many also didn't read the fine print. 

The weakening dollar isn't helping at all.  I can understand the government bailing out irresponsible and unlucky home buyers under foreclosure notice, or lending agencies that are nearing bankruptcy, in that 2% of US homeowners would probably lose their home.  Having this many people lose their homes would just simply be too destructive for the general well-being of our society.  I believe the ramifications of allowing that would in the end be even more expensive for the US taxpayer, although it is speculative.

Thank you for the article.