There’s interesting news on the delinquency front: by some measures, delinquency rates are falling. If the trend continues, we should see fewer foreclosures in the future. But is there a trend here, or something else?

According to the Mortgage Bankers Association, at the end of the first quarter of 2011, the percentage of loans that were seriously delinquent was 8.10 percent, 50 basis points (half a percent) lower than the fourth quarter of 2010 and 144 basis points (1.44 percent) lower than a year ago. Compared with last quarter, the non-seasonally adjusted seriously delinquent rate decreased for all loan types.

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Unemployed? Underwater? Can’t refinance? If so, why not head to the D.C. area next week and voice your struggles and concerns to our people in power.

Beginning on Monday, the Federal Deposit Insurance Corporation (FDIC) and the Federal Reserve are hosting a two-day symposium regarding the future of the mortgage and housing markets. From October 25-26, professionals from the public, private and academic sectors will meet to discuss everything from loan mods to mortgage securitization.

Federal Reserve Chief Ben Bernanke will kick off the free event (which is open to the public), and FDIC Chairman Sheila Bair will be a keynote speaker: Read the rest of this entry »

It has been nearly impossible to dodge the near-constant news of bank failure after bank failure. It seems as though every Monday morning our inboxes have been contained another news alert that a bank has either failed or been taken over.

We’ve advised readers on the ways to ensure that their money will be protected: verify that your bank is FDIC insured, keep your accounts under the $250,000 insurance limit, etc. However, you need to be concerned, or at least aware, of individual bank failures — even if they aren’t happening to your bank or even if they’re happening hundreds of miles away.

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Towards the end of 2008, the meltdown in the financial and mortgage markets led to a credit crisis that froze lending nationwide. For a while now analysts have been forecasting another looming credit crisis — this time it has to do with the commercial real estate market. Finance and economic blogger Calculated Risk predicted declines back in December 2008.

However, what makes this “latest” threat to U.S. lending institutions particularly dangerous, is that several Federal entities — from the Federal Reserve, to the Treasury, to the FDIC — are financially stretched to their limits, and may be unable or unwilling to provide adequate support to lenders if or when the time arises.

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Another 111 lenders have been added to the Federal Deposit Insurance Corporation’s (FDIC) “problem bank” list. That bring the nation’s ‘problem bank’ list to a grand total of 416, the most in about 15 years. The institutions on the problem list represent nearly $300 billion in assets that the FDIC is responsible for insuring if they do indeed fail.

Eighty-one banks have failed so far in 2009, and the experts say there are more to come. The increase in failures has already prompted the FDIC to increase certain fees that they charge banks in order to raise additional funds:

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UPDATE 1: Ally bank has lowered the interest rate on their one year CD to 2.35% from 2.80% after the American Bankers Association (ABA) voiced their concern to the FDIC. The ABA claimed that Ally’s rates were above the normal market value, and was merely an attempt from a struggling bank to attract depositors.

Ally claims their rate reduction had more to do with market conditions than pressure from Federal agencies. Formerly GMAC Bank, Ally passed the Treasury’s stress test and was deemed healthy by Federal standards. Agencies like the ABA rebuked Ally’s “healthy” status, saying that the bank’s public financial reports reveal that the bank is on shaky ground. Add in the fact that the government owns a controlling stake in Ally’s parent company and the whole situation just got a lot grayer : Read the rest of this entry »

According to information obtained by CNBC, President Obama has asked members of Congress to “fast-track” a legislation that would allow the Federal government to take over large financial institutions — much in the same way the FDIC does with commercial banks:

Such authority would allow the government to seize control of [bank holding] companies that posed a risk to the system and unwind their businesses in an orderly, yet expeditious fashion. Such authority would presumably allow the government to amend contracts, as necessary.

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As the Federal Deposit Insurance Corporation (FDIC) prepares for additional bank failures, chairwoman Sheila Bair has asked Congress for more money. Bair says the FDIC needs $500 billion because the corporation hadn’t collected insurance premiums for 10 years. The blame doesn’t exactly fall entirely on the shoulders of the FDIC:

The Federal Deposit Insurance Corporation, which insures deposits up to $250,000, tried for years to get congressional authority to collect the premiums in case of a looming crisis. But Congress believed that the fund was so well-capitalized – and that bank failures were so infrequent – that there was no need to collect the premiums for a decade, according to banking officials and analysts.

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Our previous post on President Obama’s Housing Affordability and Stability Plan asked “Will only deserving homeowners get help?”. We pointed out, among other things, that the head of the FDIC acknowledges that “it’s not likely aid will be denied to all homeowners who overstated their income or assets”.

A recent editorial in The Wall Street Journal suggested this possibility even more strongly.

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On Thursday the Federal Deposit Insurance Corporation (FDIC) announced that their list of troubled banks increased from 171 to 252 in the last three months of 2008 — the largest total since the middle of 1995.

While many consumers would love to get their hands on this list, Federal officials — realizing the potential for disaster — do not release this information to the public. Revealing such information could cause consumers to panic, likely resulting in a run on bank deposits — similar to what happened at IndyMac.

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