Mortgage news

News, trends and analysis of the mortgage and credit market

Monday, October 27, 2008

Feds To Bail Out 2 Dozen Banks




OCt 27, 2008 Best-Mortgage-Companies.com
Sources said Monday October 27, 2008 that FED’s regulators have decided to help a dozen banks with capital from the government. But the companies' names were not released in order to avoid creating winners and losers in the financial market , for the latter could have faced negative sentiments from customers, counterparties and investors.

The bailout was evidenced by PNC receiving $7.7 billion in federal funds, which allowed the company to buy ailing National City Bank. Alabama-based Regions Financial said earlier this week that the government had accepted its application to be part of the program.

An initial $125 billion was allocated to nine of the largest US banks, including Citigroup, JP Morgan Chase and Bank of America.

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PNC to acquire struggling bank





Oct 27, 2008 Best-Mortgage-Companies.com
In a deal worth about $5.6 billion, Pittsburgh-based PNC will acquire ailing bank National City. The sale, which values National City at $2.23 per share, would create the nation's fifth-largest US bank with $180 billion in deposits. PNC is exchanging $5.2 billion in stock and paying an additional $384 million in cash for National City.
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Thursday, October 23, 2008

New technologies to make your home smarter




Oct 22 2008 Best-Mortgage-Companies.com
Wired-home technology is getting more affordable for the average homeowner. Some of the first home automation systems were priced at $35,000 to $45,000. Today, similar systems cost as low as $2,500.

More and more technology can be woven into our homes. To get most of these home innovations, all your computers and electronics will be networked.

With a digitally networked home, you can manage your music and movie files on a media server so they can be heard or watched in any connected room. You can control your lights, your thermostat and even your window blinds with a touch of a button. Movies can be downloaded from the Internet and watched immediately on your big-screen televisions.
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Sunday, October 19, 2008

Rates ease but credit still freezes




Oct 19 2008 Best-Mortgage-Companies.com
Bank-to-bank lending rates went lower last Friday and demand for Treasury bills let up slightly, but there are signs companies that need credit most might not be able to obtain it.

Corporate bonds are being issued at the slowest pace in a decade, and it's been three weeks since a high-yield corporate bond has been issued.

This drought is partially due to companies sitting on the sidelines, waiting for conditions to improve. But it's also because there are not enough buyers. This is a problem, because when companies can't get funding from the markets, they have to draw down their credit facilities with their banks -- which often forces banks to jack up their rates.
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Sunday, October 12, 2008

WIll Your Bank Weather The Storm?




Oct 12, 2008 Best-Mortgage-Companies.com
Use these THREE measures to find out:



  • Risk-based capital ratio

    The FDIC mandates that a bank's risk-based capital be no less than 6% of its total assets. You'd like a little more cushion than that--perhaps 8%. To find this ratio in the call report, turn to the Regulatory Capital section, called Schedule RC-R, and look for the line item "Total risk-based capital ratio."



  • Loan-to-deposit ratio

    The larger that percentage, the greater the risk the bank has taken on. If customers begin to pull deposits, the bank might be suddenly strapped for cash.
    It should be between 95% to 105%. To find this measure, divide "loans and leases, net of unearned income and allowance" (item 4.d. in Schedule RC-Balance Sheet) by "deposits" (item 13 in the same Schedule).



  • Amount of non-current loans (those 30 days or more past due) vs. total amount lent.

    To calculate your bank's percentage, divide the total dollar amount of loans that are 30 days or more past due (found in Schedule RC-N) by total loans and leases (again, item 4.d. in Schedule RC-Balance Sheet).


  • If your bank is struggling and the FDIC takes it over, know that you may not have access to your funds for several days during the change-over period. To be safe, small-business owners should have a week's worth of operating expenses deposited at another institution.
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Saturday, October 11, 2008

Two more banks collapse




Oct 10, 2008 Best-Mortgage-Companies.com
Main Street Bank of Northville, Michigan and Meridian Bank of Eldred, Illinois became the latest victims of the ongoing financial crisis as their deposits were transferred respectively by the Federal Deposit Insurance Corp to Monroe Bank & Trust and National Bank yesterday October 10, 2008.
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Mortgage Rates Increase Sharply

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Thursday, October 9, 2008

Bank of America, Citigroup and JP Morgan Chase to Raise Fees




Oct 09, 2008 Best-Mortgage-Companies.com

The sale of Wachovia's banking operations and other assets to Citigroup on Monday leaves the nation with three only megabanks to set the rules: Bank of America, Citigroup and JP Morgan Chase

For customers of those institutions , the consolidation may result in higher fees on everything from checking accounts to bounced checks and overdrafts, and lower interest-rate yields on deposit accounts, banking experts said.

Loan availability also remains in question , as liquidity won’t return to mortgage-backed securities in the near term after the bailout plan passed through Congress.
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Wednesday, October 8, 2008

Citigroup acquires Wachovia's banking operations




October 7, 2008 Best-Mortgage-Companies.com
Federal Deposit Insurance Corporation confirmed on September 29 2008 that Citigroup Inc. will acquire the banking operations of Wachovia Corporation; Charlotte, North Carolina.

The transaction was facilitated by the Federal Deposit Insurance Corporation and concurred with by the Board of Governors of the Federal Reserve and the Secretary of the Treasury in consultation with the President. All depositors are fully protected .There will be no interruption in services and bank customers should expect business as usual, said FDIC Chairman Sheila C. Bair.

Citigroup Inc. will acquire the bulk of Wachovia's assets and liabilities, including five depository institutions and assume senior and subordinated debt of Wachovia Corp. Wachovia Corporation will continue to own Wachovia Securities, AG Edwards and Evergreen. The FDIC has entered into a loss sharing arrangement on a pre-identified pool of loans. Under the agreement, Citigroup Inc. will absorb up to $42 billion of losses on a $312 billion pool of loans. The FDIC will absorb losses beyond that. Citigroup has granted the FDIC $12 billion in preferred stock and warrants to compensate the FDIC for bearing this risk.
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Monday, October 6, 2008

Fed injects more billion into banks





The Federal Reserve announced on October 6, 2008 that it will increase by hundreds of billions of dollars the money it makes available to the nation's banks.

As the crisis in financial markets has become very acute, the Government is trying to provide all the liquidity that is needed so that banks don't become insolvent .

The Fed will allow banks to bid in an auction for the rate they're willing to pay to borrow the funds, and it will accept a much wider range of collateral for the loans than in other forms of lending by the central bank.


The Fed also announced it would pay banks interest on their reserve holdings. This would allow the central bank to have control over the fed funds rate, its key overnight lending rate target.
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