Real Estate and Home Loan Information

Richest Cities in America by Total Net Worth

2011-12-11T19:08:00.000-08:00

Richest Cities in the US by Zip Code and Net Worth

The richest city in the US according to a a study for Businessweek.com done by a Little Rock data company called the Gadberry Group is Los Altos, California. According to Gadberry, the average http://www.blogger.com/img/blank.gif annual income in Los Altos is $256,476 a year and the total net worth is a cool $1.563,480.

For the full list, see Richest Cities in the US by Zip Code and Net Worth

Natural Gas Pipeline Maps

2010-10-13T16:32:00.000-07:00

On September 9, 2010 a 30-inch diameter natural gas transmission pipeline (Line 132) owned and operated by Pacific Gas & Electric Company (PG&E) ruptured in a residential area in San Bruno, California. The explosion and fire killed 8 people, destroyed 37 homes and damaged another 18 homes in the blast vicinity. Before and After Photos

We would not want to own a home within the blast zone at any price and would try to avoid homes close to the pipeline that are at risk of destruction from a fire.

These Natural Gas Pipeline Maps should be useful in selecting a safe place to live.

Before

After

FHA Slashing Reverse Mortgage Costs

2010-09-19T07:06:00.000-07:00

According to the LA Times, the Federal Housing Administration (FHA) is finalizing plans to reduce the initial mortgage insurance premium on certain loans to 0.01% of a home's value from 2%.

A home-equity conversion mortgage is a federally guaranteed reverse mortgage designed to let homeowners 62 or older tap the equity in their homes. The loans and accrued interest don't have to be repaid until the owner sells the home, dies or fails to live there for one year, but the loans have traditionally carried significant upfront and annual expenses.
According to participants on the conference call, there would be two types of home-equity conversion mortgages beginning this fall: a "standard" loan and a "saver" loan.
The saver loan would have an upfront mortgage insurance premium of 0.01% of a home's value, but the amount that could be borrowed, known as the principal limit, would be reduced by at least 10%. That would lower the risk to the FHA, which guarantees the loans. Because a smaller amount could be borrowed, the saver loan could be marketed as an alternative to a home-equity line of credit to seniors on fixed incomes who can't make the monthly minimum interest payments required on such lines of credit.
Under the standard loan, the upfront mortgage insurance premium charged by the FHA would remain 2% of the property value (or a maximum of 2% of the FHA maximum loan limit of $625,500), and the principal limit would be cut 1% to 5% of a home's value, depending on the borrower's age.
For both loans, the monthly mortgage insurance premium, which is 0.5% of the mortgage balance for a traditional home-equity conversion mortgage, would increase to 1.25%.

According to David Chee , the FHA will reduce Home Equity Conversion Mortgage (HECM) proceeds ands raise premiums in October:

The U.S. Department of Housing and Urban Development (HUD) will increase the annual Mortgage Insurance Premium (MIP) charged on the Home Equity Conversion Mortgage from .50% to 1.25%. Additionally, they will likely reduce the available proceeds from a reverse mortgage by a “single digit” percent. This will take effect in October. 2010. HUD said these changes are necessary to ensure the program is sustainable. The current National Lending Limit is also set to expire on January 1, 2011. It is currently at $625,500 and will return to $417,000 unless Congress extends it. These changes will reduce the proceeds from a reverse mortgage. If you are considering a reverse mortgage in the near future, now is the time to act. If you would like more money and less fees, prior to the reduced benefit change in October, please call David Chee, Vice President and Certified Public Accountant at Seniors Reverse Mortgage Inc. at 1-800-967-3575.

No Money Down Home Loans Are Here Again

2010-09-10T13:54:00.000-07:00

The pilot program is called "Affordable Advantage," and it has now been adopted by four states as of Sept. 10, 2010. These are Idaho, Massachusetts, Minnesota and Wisconsin. Other states, such as California, Colorado and Pennsylvania have similar state programs. The deal includes a program to help homebuyers if they become unemployed, lowered fees and there is no requirement that the homebuyer purchase mortgage insurance.

To qualify:

* First time homebuyer
* Credit score above 680
* 30-year fixed rate mortgages only.
* $1,000 down payment. Buyers put in $1,000 and must live in the home.

With a possible $1,000 state housing grant, you pay nothing down!

For more information, see How To Get a No Money Down Home Loan - Affordable Advantage Program

Related Stories

Best Mortgage Rates

Historical Mortgage Rates

Network Capital Mortgage Rates

2010-09-03T06:40:00.000-07:00

Below are the mortgage rates for Network Capital.

From Network Capital Mortgage Rates

Fixed Rate Loans as of 9/2/10

30 yr Fixed:3.750% - (3.890% APR)
30 yr FHA: 4.250% - (4.930% APR)
15 yr Fixed:3.375% - (3.700% APR)
5 yr Fixed:3.375% - (3.352% APR)

For More Information, see:

Current LIBOR Rates

2010-08-11T09:30:00.000-07:00

LIBOR RATES for Aug. 11, 2010

End of Day quotes for LIBOR Rate Quotes

1-week LIBOR Rate = 0.26%
1-Month LIBOR Rate = 0.27%
3-Month LIBOR Rate = 0.38%
1-Year LIBOR Rate = 0.97%

For current LIBOR quotes and charts, see LIBOR Quotes

LIBOR is the London Interbank Offered Rate. It is a daily reference rate based on the interest rates banks in the London wholesale money market (or interbank market) offer to lend unsecured funds to each other. LIBOR is usually slightly higher than the London Interbank Bid Rate (LIBID). LIBID is the rate the same banks are prepared to accept deposits.

For more information, see

Single-Family Home Prices in Gold

2010-04-23T08:20:00.000-07:00

Home Price to Gold Price Ratio: Median single-family home price divided by the price of an ounce of gold

Chart of the day says "it currently takes 153 ounces of gold to buy the median single-family home.

This is considerably less that the 601 ounces it took back in 2001.

When priced in gold, the median single-family home is down 75% from its 2001 peak and remains well within the confines of its five-year accelerated downtrend."

Top CD Rate Surveys

==> Highest APY CDs with FDIC <==
.
CD Rates at Largest US Banks

Source: Chart of the Day

Home Prices Bottomed February 2009

2010-04-01T17:39:00.000-07:00

This week Standard & Poors released the January Housing Price Index. While the index showed a small decline from December, prompting some to say that we're in a double-dip, a look at the index over time seems to indicate that we put in a bottom in February 2009 and are leveling out after a little bump last summer. To draw your own conclusions, visit Seattle Bubble and take a look at the raw Home Price Index numbers in the fourth graph down the page.

Jim Rogers Says US Bonds & Chinese Property in a Bubble

2010-01-19T06:41:00.000-08:00

Jim Rogers, author of “A Bull in China” told Bloomberg News today (Rogers Says Shanghai, Hong Kong Property in Bubble) that Shanghai and Hong Kong property prices may fall after being driven higher by speculative demand.

Rogers says the rest of the Chinese economy is “hardly in a bubble."

“Certainly, Shanghai real estate or Hong Kong real estate should decline.”

“China now realizes that they’ve created too much money, that prices are going up too much and they’re trying to slow things down,” Rogers said. “These things are designed to take some of the heat out of the economy. Let’s hope it works.”

“My goodness, if anything's in a bubble in the world, that and U.S. government bonds are certainly very overpriced.”

Bloomberg reported "China’s property sales jumped 75.5 percent to 4.4 trillion yuan ($644 billion) last year, led by the eastern cities of Zhejiang and Shanghai" while U.S. 10-year treasury notes yield 3.67% and the 20-year average is 5.54%.

More information:

US Treasury: Rates at a Glance
US Treasury: Auction Calendar

US Mortgage Rates

2009-11-30T07:59:00.000-08:00

Mortgage Rates in the United States, the National Average as of 11/30/09.

	CURRENT	1 MONTH PRIOR	6 MONTH PRIOR	1 YEAR PRIOR
30-Year Fixed	4.97	5.18	5.08	5.76
15-Year Fixed	4.48	4.64	4.78	5.5
5/1-Year ARM	4.24	4.27	4.6	5.95
1-Year ARM	3.92	3.91	4.28	5.99
30-Year Fixed Jumbo	5.89	6.08	6.59	7.26
15-Year Fixed Jumbo	5.44	5.57	5.95	6.45
5/1-Year ARM Jumbo	4.81	4.7	5.16	6.18

Data from bankrate.com

For the latest table, see Best Mortgage Rates - Top Lenders Survey

Single Family Home Prices Inflation Adjusted Chart

2009-09-25T07:32:00.000-07:00

Below is a chart showing single family home prices are currently 30% off their peak. The data is adjusted for inflation from 1970 through August 2009.

Chart above and comments below courtesy of chartoftheday.com

The median price of a single-family home dropped 2.3% in August.
Housing prices are currently 30% off their 2005 peak. In fact, a home buyer who bought the median priced single-family home at the 1979 peak has seen that home appreciate by a mere 4%. Not an impressive performance considering that three decades have passed.
Over the past two months, single-family home prices have resumed their decline and remain (until proven otherwise) in an accelerated downtrend.

Texas Ratios and Cease and Desist Orders

2009-09-12T16:52:00.000-07:00

Back from a long Labor Day vacation and another 11 banks have closed in the past 3 weeks. But before I get into the details, Mike has asked about number 45 on my list, Earthstar Bank in Philadelphia.

Earthstar made my original list because of a cease and desist order they got from the FDIC on May 28, 2008. While the official FDIC watch list may be a secret, they do release a list of orders every month including “cease and desist” orders. These are generally released about 2 months after the fact, but they are available at www.fdic.gov. The FDIC cease and desist orders give an insight into not only the bank’s loan portfolio, but also the quality of the bank’s management and quality control.

Earthstar also has a high “Texas ratio.” It wasn’t so high when I started my list, but has continued to rise over the past three quarters. The Texas ratio is a comparison of their non-performing loans to their reserves expressed as a percentage. In the days of the savings and loan debacle, most banks that failed had Texas ratios of over 100 (percent). Earthstar had a Texas ratio of 197 according to their June 30th filing with the FDIC. That means that their non-performing loans were almost twice as much as their reserves. You can look both of these up at nuscho.com.

Now back to my regularly scheduled commentary.

On Friday, August 28th, three banks closed beginning with Bradford Bank in Baltimore. Bradford Bank was operating under two cease and desist orders dated 2-26-09 and its Texas ratio had risen to 631 by the end of the second quarter. Bradford Bank had nine branches and deposits of about $383 million. These have been taken over by Manufacturers and Traders Trust Company (M&T) of Buffalo, New York. The estimated cost to the insurance fund is $97 million or 25 cents on the dollar.

The next bank closed that day was Mainstreet Bank in Forest Lake, Minnesota. Mainstreet Bank was operating under a cease and desist order dated December 12, 2008 and had a Texas ratio that had risen to 692. It was number 51 on my list of banks most likely to fail in 2009. Mainstreet had eight branches and deposits of $434 million which were taken over by Central Bank of Stillwater, MN. The estimated cost to the FDIC insurance fund is $95 million or 22 cents on the dollar.

Two time zones later, Affinity Bank of Ventura, California closed. Affinity had been given a cease and desist order on April 22, 2009 and its Texas ratio had risen to 326. The ten branches and deposits of $922 million were taken over by Pacific Western Bank of San Diego. The estimated cost to the insurance fund is $254 million or 28 cents on the dollar.

Just before the Labor Day weekend, five more banks were closed. Many people, like me, were traveling and missed the news.

First Bank of Kansas City was a small bank. It only had one office and deposits of a mere $15 million. Great American Bank of DeSoto, Kansas has taken over operations. The closing is estimated to cost the FDIC $6 million or 40 cents per dollar. Its Texas ratio was 246.

InBank of Oak Forest, Illinois, had three branches. It too was closed on September 4th. InBank had deposits of $212 million which were taken over by MB Financial Bank of Chicago. You’ll read more about MB Financial Bank later. InBank’s Texas ratio stood at 203. The closing will cost the FDIC insurance fund $66 million or 31 cents per dollar.

Also in Illinois, Platinum Community Bank in Rolling Meadows had two offices. One was in Rolling Meadows. The other was in the offices of Taylor, Bean & Whitaker in Ocala, Florida. Taylor Bean & Whitaker owned the bank. Platinum Community Bank had a Texas ratio of 202, but that didn’t matter. What drove the closure was the fact that Taylor Bean filed for bankruptcy on August 24th. The building has been closed and the FDIC will be mailing checks to account holders who had $305 million on deposit. Federal direct deposits such as Social Security will be redirected to MB Financial Bank’s branch in Palatine, Illinois. The estimated cost to the insurance fund is $114.3 million or 37 cents on the dollar.

Vantus Bank of Sioux City, Iowa had 15 branches. These have now all been taken over by Great Southern Bank of Springfield, Missouri. I’m not sure the name Great Southern will sell well in Sioux City. The Missouri bank should consider setting up another name such as Great Plains State Bank. Vantus Bank had deposits of $368 million and a Texas ratio of 272. The estimated cost to the FDIC insurance fund to make the depositors whole is $168 million or 46 cents per dollar.

First State Bank, Flagstaff, Arizona also closed last week. First State had deposits of $95 million at 6 branches. That makes for some awfully small branches. The bank failed relatively quickly. It got a cease and desist order on May 1st which was announced by the FDIC on June 26th. Its Texas ratio was only 143 at the end of the second quarter. That puts it in the danger zone, but lately the FDIC has had worse banks to deal with. Sunwest Bank of Tustin, California has taken over operations. The estimated cost to the insurance fund is $47 million or 49 cents on the dollar.

Yesterday, three more banks closed.

The first was Corus Bank in Chicago. This was not unexpected. Corus was operating under special oversight of the Office of Thrift Supervision. Its Texas Ratio had skyrocketed to 809. It announced on July 31st, “As of June 30, 2009, Corus' subsidiary, Corus Bank N.A. (the "Bank") had preliminary Tier 1 capital of negative $157 million with a ratio of (2.1)%, and preliminary Tier 1 risk-based capital and total risk-based capital of negative $157 million with a ratio of (3.1)%, as reported in its June 30, 2009 Report of Condition and Income ("Call Report") filed on July 30, 2009. As of June 30, 2009, the Bank was considered "critically undercapitalized" under the regulatory framework for prompt corrective action ("PCA"). ” biz.yahoo.com By citing the “prompt corrective action” regulations, Corus was practically begging to be shut down. Corus was number 63 on my list. Deposits at the eleven Corus branches were $6.6 billion, and these go to MB Financial Bank. MB Financial will only be taking $3 billion of $7 billion in assets though, leaving the task to the FDIC to sell off the other $4 billion. The FDIC estimates the loss to the insurance fund will be $1.7 billion, which is 26 cents on the dollar. With the absorption of accounts from three Illinois banks in the past three weeks, MB Financial adds 14 branches to their 80+ branch network, and $6.8 billion to their $10 billion in deposits.

Brickwell Community Bank, in Woodbury, Minnesota was the second bank closed yesterday. Brickwell had $63 million in deposits at a single office that will be taken over by CorTrust Bank of Mitchell, South Dakota. Brickwell has been under a cease and desist order since March 3rd and had a Texas ratio of 567. The estimated cost to the insurance fund is $22 million or 35 cents on the dollar.

The last bank to close was Venture Bank of Lacey, Washington. Venture Bank had 18 branches and $903 million in deposits. The Texas ratio was… are you ready? 1,243. That means non-performing assets were over 12 times capital reserves. The bank was considered undercapitalized, which in this day of mark-to-hopes-and-dreams accounting, means woefully undercapitalized. They’ve had a Prompt Corrective Action directive since February 13th and haven’t been able to fulfill it. First-Citizens Bank and Trust of Raleigh, North Carolina will be taking over operations. The FDIC had to go 3,000 miles away to find a willing bank for this mess. The FDIC estimates that this will cost the insurance fund (the taxpayers now) $298 million or 33 cents per dollar on deposit.

I was in Washington state last week, and the place definitely seemed to have more banks than the depositors could support. In contrast, across the border at Royal Bank of Canada, the branches were always busy and I was fighting for a parking place.

So I cross off two more banks from my list, leaving 35 banks left on my current list of the 50 65 Banks Most Likely to Close in 2009. I started the list with 50 banks and added some during the first half of the year to grow the list to 65. While the banking environment continues to deteriorate, I don’t think I’ll be adding any more banks to the list this year. There are only 16 weeks left and it’s too hard to guess which ones will close this year and which will hold off until next year. So I think I’ll stand pat and hope for better than 50% on my predictions. (I’m at 46% so far and the year is only 69% complete.)

I may start next year with a list of the 100 banks most likely to fail in 2010.

Anyway, here’s the list with Mainstreet Bank and Corus Bank now crossed off.

65 Banks Most Likely to Close in 2009

~~1 Magnet Bank, Salt Lake City, UT~~
~~2 Citizens Community Bank, Ridgewood, NJ~~
~~3 FirstBank Financial Services, McDonough, GA~~
~~4 Westsound Bank, Bremerton, WA~~
~~5 Suburban Federal Savings Bank, Crofton, MD~~
~~6 America West Bank, Layton, UT~~
~~7 Silver Falls Bank, Silverton, OR~~
~~8 Ocala National Bank, Ocala, FL~~
9 Sun Security Bank, Ellington, MO
10 Eastern Savings Bank, FSB, Hunt Valley, MD
~~11 Alliance Bank, Culver City, CA~~
~~12 FirstCity Bank, Stockbridge, GA~~
13 Chestatee State Bank, Dawsonville, GA
14 First Security National Bank, Norcross, GA
15 Ocean Bank, Miami, FL
16 Family Bank and Trust Co., Palos Hills, IL
~~17 Southern Community Bank, Fayetteville, GA~~
18 BankCherokee, Saint Paul, MN
19 First Tuskegee Bank, Tuskegee, AL
20 Federal Trust Bank, Sanford, FL
~~21 Pinnacle Bank, Beaverton, OR~~
22 Lake Country Community Bank, Morristown, MN
23 Mesa Bank, Mesa, AZ
~~24 Bank of Wyoming, Thermopolis, WY~~
25 1st American State Bank of Minnesota, Hancock, MN
~~26 First State Bank of Altus, Altus, OK~~
27 EvaBank, Eva, AL
~~28 Strategic Capital Bank, Champaign, IL~~
~~29 Ebank, Atlanta, GA~~
30 Polk County Bank, Johnston, IA
31 Parkway Bank, Rogers, AR
~~32 Security Bank of Gwinnett County, Suwanee, GA~~
33 State Bank of Park Rapids, Park Rapids, MN
34 Herrin Security Bank, Herrin, IL
~~35 Omni National Bank, Atlanta, GA~~
36 Northpointe Bank, Grand Rapids, MI
37 Towne Bank of Arizona, Mesa, AZ
38 Timberland Bank, El Dorado, AR
39 Blue Ridge Savings Bank, Inc., Asheville, NC
~~40 First Piedmont Bank, Winder, GA~~
41 Select Bank, Grand Rapids, MI
42 Oxford Bank, Oxford, MI
~~43 Security Bank of North Metro, Woodstock, GA~~
~~44 MetroPacific Bank, Irvine, CA~~
45 Earthstar Bank, Southampton, PA
~~46 Neighborhood Community Bank, Newnan, GA~~
47 The Home Savings and Loan Company, Youngstown, OH
~~48 Heritage Community Bank, Glenwood, IL~~
~~49 Vineyard Bank, NA, Rancho Cucamonga, CA~~
50 Community Bank of Lemont, Lemont, IL
~~51 Mainstreet Bank, Forest Lake, MN~~
~~52 Mutual Bank, Harvey, IL~~
~~53 Freedom Bank of Georgia, Commerce, GA~~
54 Newton County Loan & Savings FSB, Goodland, IN
55 Riverside Bank, Cape Coral, FL
~~56 BankUnited, Coral Gables, FL~~
~~57 American Sterling Bank, Sugar Creek, MO~~
58 The Park Avenue Bank, New York, NY
59 First Commerce Community Bank, Douglasville, GA
60 Centennial Bank, Ogden, UT
61 Warren Bank, Warren, MI
62 Peoples First Community Bank, Panama City, FL
~~63 Corus Bank, Chicago, IL~~
64 Butler Bank, Lowell, MA
65 Republic Federal Bank, Miami, FL

24 Banks Close in 5 Weeks

2009-08-22T12:27:00.000-07:00

It has been 5 weeks since I last updated my bank closing list and a lot has happened in that time. I noted in my July 18th post that the pace of bank closings has picked up and indeed it has.

On Friday, July 24th, seven banks were closed. In Clarence, New York, Waterford Village Bank was closed and Evans Bank took over. Waterford Village Bank had only one office and deposits of about $58 million. The estimated cost to the insurance fund is $5.6 million or 10 cents on the dollar.

On the same day, six banks were closed in Georgia. The six banks were all subsidiaries of Security Bank of Macon, Georgia. The six banks involved were: Security Bank of Bibb County, Macon, GA, with $1 billion in deposits; Security Bank of Houston County, Perry, GA, with $320 million in deposits; Security Bank of Jones County, Gray, GA, with $387 million in deposits; Security Bank of Gwinnett County, Suwanee, GA, with $292 million in deposits; Security Bank of North Metro, Woodstock, GA, with $212 million in deposits; and Security Bank of North Fulton, Alpharetta, GA, with $191 million in deposits. Security Bank of Gwinnett County was number 32 on my list. Security Bank of North Metro was number 43.

The six banks had a total of 20 branches, which reopened as branches of State Bank and Trust Company of Pinehurst, Georgia. The estimated cost to the insurance fund is $807 million or 34 cents per dollar on the total deposits of about $2.4 billion.

On July 31st, five banks were closed.

First State Bank of Altus had one main office and one branch at the local Wal-Mart. It was number 26 on my list. The deposits were taken over by Herring Bank of Amarillo, Texas. First State Bank of Altus had deposits of $98.2 million. The closing is estimated to cost the FDIC $25.2 million or 26 cents per dollar.

Integrity Bank of Jupiter, Florida, with one office, has been taken over by Stonegate Bank of Fort
Lauderdale. Integrity Bank had deposits of $102 million and the closing will cost the FDIC insurance fund $46 million or 45 cents per dollar.

Peoples Community Bank of West Chester, Ohio had 19 branches. These have now all been taken over by First Financial Bank of Hamilton, Ohio. Peoples Community had deposits of $598.2 million and the estimated cost to the FDIC insurance fund to make the depositors whole is $129.5 million or 22 cents per dollar.

First BankAmericano in New Jersey had six branches. They have now been taken over by Crown Bank of Brick, NJ. First BankAmericano had deposits of about $157 million and the cost to the insurance fund is estimated at $15 million or 10 cents per dollar.

The fifth bank to close on July 31st was Mutual Bank of Harvey, Illinois. Mutual Bank has 12 branches and was number 52 on my list. The FDIC had to look far and wide to find someone willing to take over this bank, eventually settling on United Central Bank of Garland Texas. Mutual Bank had deposits of $1.6 billion and the estimated cost to the insurance fund is $696 million or 44 cents per dollar.

On August 7th, two banks in Florida and one in Oregon were closed.

First State Bank of Sarasota had nine branches with deposits of $387 million. These have now been taken over by Stearns Bank from St. Cloud, Minnesota. Stearns Bank is establishing quite a presence in the Sarasota area because they also took over the four branches of Community National Bank of Sarasota County. Community National Bank had deposits of $93 million. The FDIC estimates the cost to the insurance fund for these two bank failures at $116 million and $24 million, or 30 cents on the dollar and 26 cents on the dollar respectively.

Community First Bank of Prineville, Oregon also closed on August 7th. Community First had eight branches and deposits of approximately $182 million. The offices were reopened by Home Federal Bank of Nampa, Idaho. The cost to the FDIC is estimated at $45 million or 25 cents on the dollar.

Last week, five banks closed including two in Arizona.

Dwelling House Savings and Loan of Pittsburgh closed its one tiny office which was taken over by Pittsburgh banking giant PNC Bank, NA. If you recall, PNC bought up National City Bank, a regional bank based in Cleveland with bail-out money in a deal announced last October. Dwelling House had deposits of a mere $13.8 million and the deal is expected to cost the FDIC $6.8 million or 49 cents on the dollar.

The big closure last week was Colonial Bank of Montgomery, Alabama. Colonial Bank had 346 branches in five states. The entire network with $20 billion in deposits spread across Alabama, Florida, Georgia, Texas and Nevada was taken over by BB&T of Winston-Salem. The estimated cost to the insurance fund is $2.8 billion, which, by some accounts, is more than the FDIC has left.

The empty insurance fund hasn't stopped the FDIC from shutting down more banks. Union Bank in Gilbert, Arizona and Community Bank of Arizona in Phoenix were also shut down last week and their operations were taken over by MidFirst Bank of Oklahoma City. Union Bank had one office with $112 million in deposits and Community Bank of Arizona had four branches with $143.8 million in deposits. In the case of Union Bank, most of the money was hot brokered deposits. $88 million was in brokered deposits and only $24 million was from local retail customers. MidFirst Bank will not be taking over the brokered deposits. The cost to the FDIC is estimated at $61 million and $25.5 million or 54 cents on the dollar and 18 cents on the dollar respectively. It's a sign of the times that Union Bank was allowed attract 78% of their deposit base through high-yielding FDIC-insured CDs and then lose over 50 cents on the dollar before it was shut down by regulators. Union Bank needed to be shut down and it should have been closed long ago.

The fifth bank to be closed last week was a bank nobody wanted. Community Bank of Nevada had 12 branches and deposits of $1.38 billion. The FDIC set up a temporary bank, called the Deposit Insurance National Bank to give depositors 30 days to close their accounts and transfer their money elsewhere. Nevada State Bank has agreed to lend a few people to staff the temporary bank. This give time for existing checks to clear before customers have to close their checking accounts. The estimated cost to the insurance fund is $781.5 million or a whopping 57 cents on the dollar. I guess they like to gamble in Las Vegas.

Which brings us to yesterday when another four banks were closed.

Two of the banks were in Georgia. ebank, with one office in Atlanta was closed and the operations and $130 million in deposits were taken over by Stearns Bank of St. Cloud, Minnesota. This follows Stearns Bank's takeover of two banks in Florida August 7th. ebank was number 29 on my list. The cost to the insurance fund is estimated to be $63 million or 48 cents on the dollar.

The second Georgia bank to close was First Coweta of Newnan. First Coweta had deposits of $155 million at four branches. These will be taken over by United Bank of Zebulun, Georgia. The estimated cost to the FDIC is $48 million or 31 cents on the dollar.

CapitalSouth Bank in Birmingham was also closed. CapitalSouth had deposits of $546 million at ten branches. The operations will be taken over by IBERIABANK of Lafayette, Louisiana. The FDIC estimates the cost to the insurance fund will be $151 million or 28 cents on the dollar.

The big one yesterday was Guaranty Bank of Austin. Guaranty Bank had 103 branches in Texas and 59 branches in California. Total deposits were approximately $12 billion. The deposits and branches will be taken over by BBVA Compass which is owned by Banco Bilbao Vizcaya Argentaria SA, the second-largest bank in Spain. BBVA Compass adds to their 579 branches across the south. Sister bank BBVA Bancomer has another 32 former Valley Bank branches in California. The FDIC estimates the cost of closing Guaranty Bank at $3 billion or 25 cents on the dollar.

So I cross off five more banks from my list, leaving 37 banks left on my current list of the 50 65 Banks Most Likely to Close in 2009.

~~1 Magnet Bank, Salt Lake City, UT~~
~~2 Citizens Community Bank, Ridgewood, NJ~~
~~3 FirstBank Financial Services, McDonough, GA~~
~~4 Westsound Bank, Bremerton, WA~~
~~5 Suburban Federal Savings Bank, Crofton, MD~~
~~6 America West Bank, Layton, UT~~
~~7 Silver Falls Bank, Silverton, OR~~
~~8 Ocala National Bank, Ocala, FL~~
9 Sun Security Bank, Ellington, MO
10 Eastern Savings Bank, FSB, Hunt Valley, MD
~~11 Alliance Bank, Culver City, CA~~
~~12 FirstCity Bank, Stockbridge, GA~~
13 Chestatee State Bank, Dawsonville, GA
14 First Security National Bank, Norcross, GA
15 Ocean Bank, Miami, FL
16 Family Bank and Trust Co., Palos Hills, IL
~~17 Southern Community Bank, Fayetteville, GA~~
18 BankCherokee, Saint Paul, MN
19 First Tuskegee Bank, Tuskegee, AL
20 Federal Trust Bank, Sanford, FL
~~21 Pinnacle Bank, Beaverton, OR~~
22 Lake Country Community Bank, Morristown, MN
23 Mesa Bank, Mesa, AZ
~~24 Bank of Wyoming, Thermopolis, WY~~
25 1st American State Bank of Minnesota, Hancock, MN
~~26 First State Bank of Altus, Altus, OK~~
27 EvaBank, Eva, AL
~~28 Strategic Capital Bank, Champaign, IL~~
~~29 Ebank, Atlanta, GA~~
30 Polk County Bank, Johnston, IA
31 Parkway Bank, Rogers, AR
~~32 Security Bank of Gwinnett County, Suwanee, GA~~
33 State Bank of Park Rapids, Park Rapids, MN
34 Herrin Security Bank, Herrin, IL
~~35 Omni National Bank, Atlanta, GA~~
36 Northpointe Bank, Grand Rapids, MI
37 Towne Bank of Arizona, Mesa, AZ
38 Timberland Bank, El Dorado, AR
39 Blue Ridge Savings Bank, Inc., Asheville, NC
~~40 First Piedmont Bank, Winder, GA~~
41 Select Bank, Grand Rapids, MI
42 Oxford Bank, Oxford, MI
~~43 Security Bank of North Metro, Woodstock, GA~~
~~44 MetroPacific Bank, Irvine, CA~~
45 Earthstar Bank, Southampton, PA
~~46 Neighborhood Community Bank, Newnan, GA~~
47 The Home Savings and Loan Company, Youngstown, OH
~~48 Heritage Community Bank, Glenwood, IL~~
~~49 Vineyard Bank, NA, Rancho Cucamonga, CA~~
50 Community Bank of Lemont, Lemont, IL
51 Mainstreet Bank, Forest Lake, MN
~~52 Mutual Bank, Harvey, IL~~
~~53 Freedom Bank of Georgia, Commerce, GA~~
54 Newton County Loan & Savings FSB, Goodland, IN
55 Riverside Bank, Cape Coral, FL
~~56 BankUnited, Coral Gables, FL~~
~~57 American Sterling Bank, Sugar Creek, MO~~
58 The Park Avenue Bank, New York, NY
59 First Commerce Community Bank, Douglasville, GA
60 Centennial Bank, Ogden, UT
61 Warren Bank, Warren, MI
62 Peoples First Community Bank, Panama City, FL
63 Corus Bank, Chicago, IL
64 Butler Bank, Lowell, MA
65 Republic Federal Bank, Miami, FL

Foreclosure Facts, Figures and Charts Tell a Scary Story

2009-08-01T09:11:00.000-07:00

These facts tell a scary story. 20% of homeowners are "upside down" in their mortgage meaning their home is worth less than what they owe. So far, 1.5 million homes have been lost to foreclosure and projections are 13 million will be lost over the next five years.

The Center for Responsible Lending says

"1 in 10 families is behind on their mortgage. The latest available figures show that the number of households at risk of foreclosure is 700% higher than the number of loan modifications, and the gap has been increasing steadily."

Click chart for full size image

More facts from Center for Responsible Lending:

15 Fast Facts

1.	Number of loans already lost to foreclosure	1.5 million
2.	Projected foreclosures on all types of loans during the next 5 years	13 million
3.	Portion of all homeowners late on their mortgage	1 in 10
4.	Portion of homes where owners owe more than property value	Nearly 1 in 5
5.	Drop in residential lending from 2008 compared to 2007	Over a trillion
6.	Between 2006 and 2008, % decline in existing home sales	24%
7.	Between 2006 and 2008, % decline in new home sales	54%
8.	Between 2006 and 2008, % decline in new construction	58%
9.	In 2009, number of neighboring homes that will lose property value because of nearby foreclosures	69+ million
10.	Average price decline per home (2009)	$7,200
11.	Total property value lost because of nearby foreclosures (2009)	$502 billion
12.	Percentage of 2006 subprime loans that went to people who could have qualified for prime loans with better terms	61%
13.	Typical rate difference between a 30-year, fixed mortgage and the initial rate of aggressively marketed ARM loans	½ to 8/10%
14.	Cumulative default rate for recent subprime borrowers with a similar risk profile to borrowers with lower-rate loans	More than 3x higher
15.	During first four years of a loan, the typical extra cost paid by subprime borrowers who get a loan from a mortgage broker, compared to other borrowers with similar characteristics	$5,222

Libor Rates Make New Historic Low

2009-07-25T08:38:00.000-07:00

London Interbank Offered Rates (LIBOR) set a new historical low this week. The short term, 1-month LIBOR rate is down to a new record low at only 0.29% from 2.46% just a year ago.

This is This table shows all LIBOR rates are down significantly from a year ago.

Updated 7/25/2009	This week	Month ago	Year ago
1 Month LIBOR Rate	0.29	0.31	2.46
3 Month LIBOR Rate	0.50	0.61	2.80
6 Month LIBOR Rate	0.96	1.15	3.14
1 Year LIBOR Rate	1.49	1.74	3.26

New historical lows shown in red

	###### LIBOR ######				Prime	Fed
	1 Mo	3 Mo	6 Mo	1 Yr	Rate	Funds
						Rate
Current %	0.29	0.50	0.96	1.49	3.25	0.25
Min %	0.29	0.50	0.96	1.46	3.25	0.25
Max %	6.94	6.85	7.07	5.43	9.5	7.063

See Libor Rates at a Glance for current rates and graphs.

Definition: LIBOR is the London Interbank Offered Rate. It is a daily reference rate based on the interest rates banks in the London wholesale money market (or interbank market) offer to lend unsecured funds to each other. LIBOR is usually slightly higher than the London Interbank Bid Rate (LIBID). LIBID is the rate the same banks are prepared to accept deposits.

Meanwhile, down at the Treasury

2009-07-21T18:21:00.001-07:00

Faster! Faster! The deficit has topped $1,000,000,000,000!

Pace of Bank Closings Picks Up

2009-07-18T12:01:00.000-07:00

Last week, only one bank was closed in the US. That was Bank of Wyoming, number 24 on my list of banks most likely to close in 2009. Bank of Wyoming had only one office and deposits of just $67 million. Its operation has been taken over by Central Bank & Trust in Lander, WY. The estimate cost to the insurance fund is $27 million or 40 cents on the dollar.

This week, four banks were closed. The largest was Vineyard Bank, NA in Rancho Cucamonga, CA which was number 49 on my list. Vineyard Bank had 16 offices had deposits of about $1.6 billion. The offices and accounts have been transferred to California Bank & Trust. The estimated cost to the insurance fund is $579 million or 36 cents on the dollar.

Close behind is Temecula Valley Bank with eleven branches in California and deposits of $1.3 billion. The offices and accounts will be taken over by First-Citizens Bank of Raleigh, NC with an estimated cost to the insurance fund of $391 million or 30 cents per dollar on deposit.

BankFirst with just 2 offices in Sioux Falls and Minneapolis will be taken over by Alerus Financial, NA. Alerus will operate the South Dakota office as First Dakota National Bank and will operate the Minnesota office as Alerus Financial, NA. BankFirst had deposits of $254 million and assets of $275 million. Alerus will take only $72 million of the assets while Beal Bank Nevada will take $177 million in loans. The remaining assets will stay with the FDIC until they can find someone willing to take them. The closing is estimated to cost the FDIC $91 million or 36 cents per dollar.

Down in Georgia, First Piedmont Bank, also with 2 offices, has been taken over by First American Bank and Trust of Athens, GA. First Piedmont Bank had deposits of $115 million and the closing will cost the FDIC insurance fund $29 million or 25 cents per dollar.

Four banks closed this week, one last week plus seven closed on July 2nd makes 12 banks closed in the first three weeks of July, double the pace of the first half of the year.

Striking three more, there are 42 banks left on my current list of the 50 65 Banks Most Likely to Close in 2009.

~~1 Magnet Bank, Salt Lake City, UT~~
~~2 Citizens Community Bank, Ridgewood, NJ~~
~~3 FirstBank Financial Services, McDonough, GA~~
~~4 Westsound Bank, Bremerton, WA~~
~~5 Suburban Federal Savings Bank, Crofton, MD~~
~~6 America West Bank, Layton, UT~~
~~7 Silver Falls Bank, Silverton, OR~~
~~8 Ocala National Bank, Ocala, FL~~
9 Sun Security Bank, Ellington, MO
10 Eastern Savings Bank, FSB, Hunt Valley, MD
~~11 Alliance Bank, Culver City, CA~~
~~12 FirstCity Bank, Stockbridge, GA~~
13 Chestatee State Bank, Dawsonville, GA
14 First Security National Bank, Norcross, GA
15 Ocean Bank, Miami, FL
16 Family Bank and Trust Co., Palos Hills, IL
~~17 Southern Community Bank, Fayetteville, GA~~
18 BankCherokee, Saint Paul, MN
19 First Tuskegee Bank, Tuskegee, AL
20 Federal Trust Bank, Sanford, FL
~~21 Pinnacle Bank, Beaverton, OR~~
22 Lake Country Community Bank, Morristown, MN
23 Mesa Bank, Mesa, AZ
~~24 Bank of Wyoming, Thermopolis, WY~~
25 1st American State Bank of Minnesota, Hancock, MN
26 First State Bank of Altus, Altus, OK
27 EvaBank, Eva, AL
~~28 Strategic Capital Bank, Champaign, IL~~
29 Ebank, Atlanta, GA
30 Polk County Bank, Johnston, IA
31 Parkway Bank, Rogers, AR
32 Security Bank of Gwinnett County, Suwanee, GA
33 State Bank of Park Rapids, Park Rapids, MN
34 Herrin Security Bank, Herrin, IL
~~35 Omni National Bank, Atlanta, GA~~
36 Northpointe Bank, Grand Rapids, MI
37 Towne Bank of Arizona, Mesa, AZ
38 Timberland Bank, El Dorado, AR
39 Blue Ridge Savings Bank, Inc., Asheville, NC
~~40 First Piedmont Bank, Winder, GA~~
41 Select Bank, Grand Rapids, MI
42 Oxford Bank, Oxford, MI
43 Security Bank of North Metro, Woodstock, GA
~~44 MetroPacific Bank, Irvine, CA~~
45 Earthstar Bank, Southampton, PA
~~46 Neighborhood Community Bank, Newnan, GA~~
47 The Home Savings and Loan Company, Youngstown, OH
~~48 Heritage Community Bank, Glenwood, IL~~
~~49 Vineyard Bank, NA, Rancho Cucamonga, CA~~
50 Community Bank of Lemont, Lemont, IL
51 Mainstreet Bank, Forest Lake, MN
52 Mutual Bank, Harvey, IL
~~53 Freedom Bank of Georgia, Commerce, GA~~
54 Newton County Loan & Savings FSB, Goodland, IN
55 Riverside Bank, Cape Coral, FL
~~56 BankUnited, Coral Gables, FL~~
~~57 American Sterling Bank, Sugar Creek, MO~~
58 The Park Avenue Bank, New York, NY
59 First Commerce Community Bank, Douglasville, GA
60 Centennial Bank, Ogden, UT
61 Warren Bank, Warren, MI
62 Peoples First Community Bank, Panama City, FL
63 Corus Bank, Chicago, IL
64 Butler Bank, Lowell, MA
65 Republic Federal Bank, Miami, FL

Hitting Bottom and the New Normal

2009-07-17T00:11:00.000-07:00

Signs are beginning to point out that the economy may have hit bottom May 31st. Housing, which led us into this recession, will probably still continue to drop in most markets, but the larger economy seems to have adjusted to the slide in housing.

GM and Chrysler have been through bankruptcy and auto sales seem to have ended their slide. Fathers, it seems, got a new tool for Father's Day and have decided to put it to use. One home improvement retailer I frequent seems to have made it through the winter and spring selling garden gloves, cheese balls and M&M candies. Now, those going through the checkout seem to have something in the basket that can actually be installed in the home. Purchases are still small. They're not buying pallet loads of lumber and drywall, but something to fix up or pretty up the home that they are stuck with.

Unlike last summer, gasoline prices are more moderate and more stable. Heating prices this winter, especially natural gas, also looks to be more moderate and stable. A new natural gas pipeline across the prairie states called the Rocky Mountain Express is bringing gas to the Midwest and East Coast from Colorado and Wyoming, reducing our purchases from Canada. And while CIT's future is very uncertain right now, we've been able to make it through the first half of the year without a major financial disruption on the order of Lehman Brothers, AIG, IndyMac, Bear Sterns, Merrill Lynch or WaMu.

Businesses seem to have adjusted to what I call "the new normal". In many cases that required writedowns, layoffs and a change in business strategy. Many businesses have made the necessary cuts and are now poised to make a profit again. It won't be as heady as before, but profits can be made. Those firms that have engaged in creative accounting (often for their very survival) will be continuing to take writedowns for many quarters to come. In the real estate market in particular, there is a lot of inventory out there that is still priced unrealistically high. Generally, those properties are "upside down" and the owners or banks don't want to (or can't afford to) book the losses. So they continue to price the property to wishful thinking.

The following chart shows the home price history in Denver and Minneapolis. These cities are sunny in the summer and snowy in the winter. The seasonal effects have been pronounced. I think Denver's prices have stabilized but Minneapolis is due for one more year of losses before recovering next spring.

Under 5% Mortgages from Charles Schwab Bank

2009-07-14T13:09:00.000-07:00

Schwab Bank has fixed rate, conforming mortgage loans from under 5.00%.

From Charles Schwab Bank Mortgage Loan Rate:

Fixed Conforming Loans (For Loan Amounts of $417,000 or Less)

Fixed Rated as of 07/14/09
	Rate	Points	APR
30yr Fixed	5.375 5.16	0.0 1.0	5.405 5.28
25yr Fixed	5.375 5.16	0.0 1.0	5.41 5.297
20yr Fixed	5.25 4.96	0.0 1.0	5.291 5.121
15yr Fixed	4.875 4.66	0.0 1.0	4.927 4.864
10yr Fixed	4.875 4.66	0.0 1.0	4.949 4.952

See Charles Schwab Bank Mortgage Rates for contact information and current rates for fixed and adjustable mortgage loans.

6 Campbell Family Banks Closed in Illinois

2009-07-03T09:45:00.000-07:00

The Illinois Department of Financial and Professional Regulation closed 6 banks in Illinois yesterday all controlled by the Campbell family. All 6 failed not due to bad lending practices directly, but concentrated investments in CDOs.

The largest was Founders Bank in Worth. Founders Bank with 11 offices in Chicago's southwest suburbs had deposits of $848.9 million. The offices and accounts have been transferred to The Private Bank and Trust Company of Chicago. The estimated cost to the insurance fund is $188.5 million or 22 cents on the dollar.

Rock River Bank with four branches had deposits of $75.8 million. The offices and accounts will be taken over by Harvard State Bank with an estimated cost to the insurance fund of $27.6 million or 36 cents per dollar on deposit.

Elizabeth State Bank with just 2 offices will be taken over by Galena State Bank and Trust. Elizabeth State Bank had deposits of $55.5 million and the closing will cost the FDIC $11.2 million or 20 cents per dollar.

First State Bank of Winchester, also with 2 offices, has been taken over by The First National Bank of Beardstown. First State Bank of Winchester had deposits of $34 million and the closing will cost the FDIC insurance fund $6 million or 18 cents per dollar.

The John Warner Bank, with 3 offices in central Illinois has been taken over by the State Bank of Lincoln. John Warner Bank had deposits of $64 million and will cost the insurance fund $10 million or 17 cents per dollar on deposit.

First National Bank of Danville, with 7 offices will be taken over by First Financial Bank of Terre Haute, Indiana. First National had deposits of $147 million and will cost the insurance fund $24 million or 16 cents per dollar.

The Campbell family also controls 2 other community banks in Illinois and Legacy Bank in Scottsdale, Arizona.

Also on Thursday, Millennium State Bank of Texas in Dallas was shut down. The one office with $115 million in deposits will be reopened on Monday as the State Bank of Texas. The cost to the FDIC is estimated at $47 million or 41 cents per dollar on deposit.

The seven banks closed this week bring the total number for calendar year 2009 to 52.

45 Banks Closed in First Half

2009-07-01T20:00:00.000-07:00

Five more banks have closed on June 26th, bringing the total for the first half of the year to 45. Two banks were in Georgia, two were in California and one was in Minnesota.

Let's start with Georgia. Community Bank of West Georgia's two locations in Villa Rica and Kennesaw were closed by the Georgia Department of Banking and Finance which was unable to find another bank willing to take over operations. Direct deposits from the federal government such as Social Security and Veterans' payments will be transferred to United Community Bank's Villa Rica branch, but for existing balances, the FDIC began mailing out checks on Monday. Deposits were approximately $182.5 million.. The FDIC has estimated the cost to the insurance fund to make depositors whole is $85 million or 47 cents on the dollar.

The other Georgia bank to close on Friday was Neighborhood Community Bank in Newnan which was number 46 on my list. CharterBank in West Point, GA has taken over operations. Neighborhood Community had deposits of $191.3 million at 4 branches. The cost to the FDIC insurance fund is estimated at $66.7 million or 35 cents on the dollar.

In California, regulators closed MetroPacific Bank in Irvine and turned over $73 million in deposits to SunWest Bank of Tustin, CA. MetroPacific was number 44 on my list. The estimated cost to the deposit insurance fund is $29 million or 40 cents per dollar on deposit.

The other California bank closed on Friday was Mirae Bank in Los Angeles. Mirae, with $456 million and five branches had a large number of customers of Korean descent. The bank has been taken over by Wilshire State Bank, another Korean-American institution. Mirae's downfall was not residential mortgages but the two-thirds of its loans that were in commercial real estate. The FDIC estimates the cost to the insurance fund at $50 million or only 11 cents on the dollar.

In Minnesota, Horizon Bank in Pine City closed and the two offices reopened on Saturday as Stearns Bank, NA. Horizon had deposits of only $69.4 million and the estimated cost to the FDIC is $33.5 million or 48 cents per dollar of insured deposit.

So, striking two more, here's my current list of the 50 65 Banks Most Likely to Close in 2009.

~~1 Magnet Bank, Salt Lake City, UT~~
~~2 Citizens Community Bank, Ridgewood, NJ~~
~~3 FirstBank Financial Services, McDonough, GA~~
~~4 Westsound Bank, Bremerton, WA~~
~~5 Suburban Federal Savings Bank, Crofton, MD~~
~~6 America West Bank, Layton, UT~~
~~7 Silver Falls Bank, Silverton, OR~~
~~8 Ocala National Bank, Ocala, FL~~
9 Sun Security Bank, Ellington, MO
10 Eastern Savings Bank, FSB, Hunt Valley, MD
~~11 Alliance Bank, Culver City, CA~~
~~12 FirstCity Bank, Stockbridge, GA~~
13 Chestatee State Bank, Dawsonville, GA
14 First Security National Bank, Norcross, GA
15 Ocean Bank, Miami, FL
16 Family Bank and Trust Co., Palos Hills, IL
~~17 Southern Community Bank, Fayetteville, GA~~
18 BankCherokee, Saint Paul, MN
19 First Tuskegee Bank, Tuskegee, AL
20 Federal Trust Bank, Sanford, FL
~~21 Pinnacle Bank, Beaverton, OR~~
22 Lake Country Community Bank, Morristown, MN
23 Mesa Bank, Mesa, AZ
24 Bank of Wyoming, Thermopolis, WY
25 1st American State Bank of Minnesota, Hancock, MN
26 First State Bank of Altus, Altus, OK
27 EvaBank, Eva, AL
~~28 Strategic Capital Bank, Champaign, IL~~
29 Ebank, Atlanta, GA
30 Polk County Bank, Johnston, IA
31 Parkway Bank, Rogers, AR
32 Security Bank of Gwinnett County, Suwanee, GA
33 State Bank of Park Rapids, Park Rapids, MN
34 Herrin Security Bank, Herrin, IL
~~35 Omni National Bank, Atlanta, GA~~
36 Northpointe Bank, Grand Rapids, MI
37 Towne Bank of Arizona, Mesa, AZ
38 Timberland Bank, El Dorado, AR
39 Blue Ridge Savings Bank, Inc., Asheville, NC
40 First Piedmont Bank, Winder, GA
41 Select Bank, Grand Rapids, MI
42 Oxford Bank, Oxford, MI
43 Security Bank of North Metro, Woodstock, GA
~~44 MetroPacific Bank, Irvine, CA~~
45 Earthstar Bank, Southampton, PA
~~46 Neighborhood Community Bank, Newnan, GA~~
47 The Home Savings and Loan Company, Youngstown, OH
~~48 Heritage Community Bank, Glenwood, IL~~
49 Vineyard Bank, NA, Rancho Cucamonga, CA
50 Community Bank of Lemont, Lemont, IL
51 Mainstreet Bank, Forest Lake, MN
52 Mutual Bank, Harvey, IL
~~53 Freedom Bank of Georgia, Commerce, GA~~
54 Newton County Loan & Savings FSB, Goodland, IN
55 Riverside Bank, Cape Coral, FL
~~56 BankUnited, Coral Gables, FL~~
~~57 American Sterling Bank, Sugar Creek, MO~~
58 The Park Avenue Bank, New York, NY
59 First Commerce Community Bank, Douglasville, GA
60 Centennial Bank, Ogden, UT
61 Warren Bank, Warren, MI
62 Peoples First Community Bank, Panama City, FL
63 Corus Bank, Chicago, IL
64 Butler Bank, Lowell, MA
65 Republic Federal Bank, Miami, FL

40 Banks Closed in 2009

2009-06-22T18:02:00.000-07:00

Four banks have closed in the first three weeks of June, bringing the total for the year now to 40.

June 5th, Bank of Lincolnwood in Illinois was closed by the state regulators. Republic Bank took over operation of the two branches. Deposits were approximately $202 million, of which Republic Bank purchased $162 million. The FDIC will dispose of the remaining deposits at an estimated cost to the insurance fund of $83 million or 41 cents on the dollar.

Things were quiet the next week, but then last Friday, three more banks shut down. The first, Southern Community Bank of Fayetteville, GA was number 17 on my list. Southern Community had deposits of $307 million at 5 branches which have been taken over by United Community Bank of Blairsville, GA. The cost to the FDIC insurance fund is estimated at $114 million or 37 cents on the dollar.

The second bank was Cooperative Bank in Wilmington, NC. Deposits were approximately $774 million including $57 million in brokered accounts. Local accounts were transferred to First Bank of Troy, NC and the cost to the FDIC insurance fund will be approximately $217 million or 28 cents on the dollar. Cooperative Bank had 24 banking offices.

The third bank closed last week was First National Bank of Anthony in Kansas. The bank had six offices including two in Johnson County operating under the name First National Bank of Johnson County. Together they had deposits of approximately $142.5 million. The Bank of Kansas has taken over operation of the six branches and their accounts. The estimated cost to the deposit insurance fund is $32.2 million or 23 cents on the dollar.

As I strike Southern Community Bank from my list, I am adding one more. The one I'm adding to the list is Republic Federal Bank of Miami, FL. The bank is now undercapitalized with 15.5% of its loans not current.

Here's my current list of the 50 65 Banks Most Likely to Close in 2009.

~~1 Magnet Bank, Salt Lake City, UT~~
~~2 Citizens Community Bank, Ridgewood, NJ~~
~~3 FirstBank Financial Services, McDonough, GA~~
~~4 Westsound Bank, Bremerton, WA~~
~~5 Suburban Federal Savings Bank, Crofton, MD~~
~~6 America West Bank, Layton, UT~~
~~7 Silver Falls Bank, Silverton, OR~~
~~8 Ocala National Bank, Ocala, FL~~
9 Sun Security Bank, Ellington, MO
10 Eastern Savings Bank, FSB, Hunt Valley, MD
~~11 Alliance Bank, Culver City, CA~~
~~12 FirstCity Bank, Stockbridge, GA~~
13 Chestatee State Bank, Dawsonville, GA
14 First Security National Bank, Norcross, GA
15 Ocean Bank, Miami, FL
16 Family Bank and Trust Co., Palos Hills, IL
~~17 Southern Community Bank, Fayetteville, GA~~
18 BankCherokee, Saint Paul, MN
19 First Tuskegee Bank, Tuskegee, AL
20 Federal Trust Bank, Sanford, FL
~~21 Pinnacle Bank, Beaverton, OR~~
22 Lake Country Community Bank, Morristown, MN
23 Mesa Bank, Mesa, AZ
24 Bank of Wyoming, Thermopolis, WY
25 1st American State Bank of Minnesota, Hancock, MN
26 First State Bank of Altus, Altus, OK
27 EvaBank, Eva, AL
~~28 Strategic Capital Bank, Champaign, IL~~
29 Ebank, Atlanta, GA
30 Polk County Bank, Johnston, IA
31 Parkway Bank, Rogers, AR
32 Security Bank of Gwinnett County, Suwanee, GA
33 State Bank of Park Rapids, Park Rapids, MN
34 Herrin Security Bank, Herrin, IL
~~35 Omni National Bank, Atlanta, GA~~
36 Northpointe Bank, Grand Rapids, MI
37 Towne Bank of Arizona, Mesa, AZ
38 Timberland Bank, El Dorado, AR
39 Blue Ridge Savings Bank, Inc., Asheville, NC
40 First Piedmont Bank, Winder, GA
41 Select Bank, Grand Rapids, MI
42 Oxford Bank, Oxford, MI
43 Security Bank of North Metro, Woodstock, GA
44 MetroPacific Bank, Irvine, CA
45 Earthstar Bank, Southampton, PA
46 Neighborhood Community Bank, Newnan, GA
47 The Home Savings and Loan Company, Youngstown, OH
~~48 Heritage Community Bank, Glenwood, IL~~
49 Vineyard Bank, NA, Rancho Cucamonga, CA
50 Community Bank of Lemont, Lemont, IL
51 Mainstreet Bank, Forest Lake, MN
52 Mutual Bank, Harvey, IL
~~53 Freedom Bank of Georgia, Commerce, GA~~
54 Newton County Loan & Savings FSB, Goodland, IN
55 Riverside Bank, Cape Coral, FL
~~56 BankUnited, Coral Gables, FL~~
~~57 American Sterling Bank, Sugar Creek, MO~~
58 The Park Avenue Bank, New York, NY
59 First Commerce Community Bank, Douglasville, GA
60 Centennial Bank, Ogden, UT
61 Warren Bank, Warren, MI
62 Peoples First Community Bank, Panama City, FL
63 Corus Bank, Chicago, IL
64 Butler Bank, Lowell, MA
65 Republic Federal Bank, Miami, FL

Current LIBOR Rates at Historical Lows

2009-06-13T10:02:00.000-07:00

London Interbank Offered Rates (LIBOR) remain near historical lows. The short term, 1-month LIBOR rate is down 2.16% to only 0.32% from 2.48% just a year ago.

Chart of 3 month LIBOR Rate vs. Time courtesy of Wikinvest

This is This table shows all LIBOR rates are down significantly from a year ago.

Updated 6/10/2009	This week	Month ago	Year ago
1 Month LIBOR Rate	0.32	0.35	2.48
3 Month LIBOR Rate	0.65	0.91	2.79
6 Month LIBOR Rate	1.27	1.43	3.17
1 Year LIBOR Rate	1.60	1.78	3.21

See Libor Rates at a Glance for current rates and graphs.

Chase Bank Mortgage Rates - Conforming & Jumbo

2009-06-04T17:45:00.000-07:00

Below are the mortgage rates for Chase Bank.

For an easier to read table plus a table for jumbo loans, please see

Chase Bank Mortgage Rates

Assume $300,000 loan with 20% ($60,000 down) in CA

Loan Type	Rate %	Points %	APR %
30-yr fixed	5.50	1.125	5.662
30-yr fixed	5.25	2.125	5.502
15-yr fixed	5.00	1.00	5.252
15-yr fixed	4.75	2.00	5.155
5/1 ARM	4.875	1.00	4.384
5/1 ARM	4.250	2.00	4.236

Jumbo Loan
Assume $1,000,000 with 20% ($200,000) down in CA with excellent credit



Mortgage Type	Current Rate	Points	APR

3/1 ARM Jumbo*	6.500	0.000	4.388	$5,056.54



3/1 ARM Jumbo*	5.000	2.000	4.140	$4,294.57



5/1 Adjustable-Rate Mortgage (ARM) Jumbo	7.250	0.250	5.162	$5,457.41



5/1 Adjustable-Rate Mortgage (ARM) Jumbo	5.125	2.000	4.376	$4,355.90



30-Year Fixed-Rate Jumbo	7.000	1.375	7.157



30-Year Fixed-Rate Jumbo	6.500	0.000	6.534	$5,056.54



30-Year Fixed-Rate Jumbo	5.750	1.875	5.958	$4,668.58

For more Jumbo rates and terms, see Chase Bank Mortgage Rates

Chase Bank Mortgage Rates as of 6/4/09

Bank of America Mortgage Rates - Conforming & Jumbo

2009-06-04T17:36:00.000-07:00

Below are the mortgage rates for Bank of America.

For an easier to read table plus a table for jumbo loans, please see

Bank of America Mortgage Rates

Assume $300,000 loan with 20% ($60,000 down) in CA



Mortgage Type	Current Rate	Points	APR %
NET 5® (5/1 Initial Interest-Only Payment) ARM*	4.500	1.000	4.210

NET 5® (5/1 Initial Interest-Only Payment) ARM*	5.375	0.000	4.432	$1,075.00



NET 5® (5/1 Initial Interest-Only Payment) ARM*	4.125	2.000	4.159	$825.00


5/1 Adjustable-Rate Mortgage (ARM)*	4.375	1.125	4.180

5/1 Adjustable-Rate Mortgage (ARM)*	5.125	0.000	4.361	$1,306.77



5/1 Adjustable-Rate Mortgage (ARM)*	4.000	2.000	4.117	$1,145.80


30-Year (10/20) Fixed-Rate Interest Only Mortgage	6.125	1.000	6.279

30-Year (10/20) Fixed-Rate Interest Only Mortgage	6.500	-0.375	6.570	$1,300.00



30-Year (10/20) Fixed-Rate Interest Only Mortgage	5.875	2.000	6.112	$1,175.00


3/1 ARM*	4.625	1.000	4.161



3/1 ARM*	5.875	0.000	4.371	$1,419.69



3/1 ARM*	4.000	2.000	4.101	$1,145.80


40-Year Fixed-Rate	5.750	1.500	5.931


40-Year Fixed-Rate	6.250	0.000	6.315	$1,362.57



40-Year Fixed-Rate	5.500	2.000	5.717	$1,237.85



30-Year Fixed-Rate	5.500	1.000	5.665


30-Year Fixed-Rate	5.875	-0.250	5.949	$1,419.69



30-Year Fixed-Rate	5.250	2.250	5.528	$1,325.29


15-Year Fixed-Rate	4.875	1.125	5.170

Bank of America Mortgage Rates as of 6/4/09

For an easier to read table plus a table for jumbo loans, please see Bank of America Mortgage Rates

Median Single-Family Home Prices In Ounces of Gold

2009-05-29T09:01:00.000-07:00

This chart courtesy of chartoftheday.com shows the median single-family home selling price divided by the price of gold.

Chartoftheday says:

This results in the home / gold ratio or the cost of the median single-family home in ounces of gold. For example, it currently takes 192 ounces of gold to buy the median single-family home. This is considerably less that the 601 ounces it took back in 2001. When priced in gold, the median single-family home is down 68% from its 2001 peak and remains within the confines of its four-year accelerated downtrend.

BankUnited Flatlines, Collects $4.9 Billion

2009-05-23T15:11:00.000-07:00

Thursday, May 21st, BankUnited of Coral Gables, FL was closed by the Office of Thrift Supervision and the FDIC was named as receiver. The FDIC immediately flipped the bank over to a group of investors led by John Kanas who have formed a new savings bank named "BankUnited". Deposits were approximately $8.6 billion in 85 branches. The FDIC has agreed to kick in an estimated $4.9 billion, or 57 cents on the dollar. The new investors will recapitalize the bank with an additional $900 million. BankUnited's demise was expected as number 56 on my list. The FDIC was ready. They issued a death certificate, paid out the insurance, attached a new head and revived the patient swiftly and cleanly. Customers won't even have to get new checks.

Friday, two banks in Illinois closed. The first, Strategic Capital Bank with one office in Champaign was number 28 on my list. Strategic Capital had deposits of $471 million which will be taken over by Midland States Bank of Effingham, IL. The cost to the FDIC insurance fund is estimated at $173 million or 37 cents on the dollar.

The second Illinois bank was Citizens National Bank in Macomb. Deposits were approximately $200 million in local accounts and $200 million in brokered deposits. Local accounts were transferred to Morton Community Bank and the cost to the FDIC insurance fund will be approximately $106 million or 26 cents on the dollar. Citizens had eight banking offices in Illinois.

After striking two from my list, I am adding one more. The one I'm adding to the list is Butler Bank of Lowell, MA. In the past year, the bank's non-performing loans have quintupled to $51.5 million while their equity capital has been halved to $12.2 million.

Here's my current list of the 50 64 Banks Most Likely to Close in 2009.

~~1 Magnet Bank, Salt Lake City, UT~~
~~2 Citizens Community Bank, Ridgewood, NJ~~
~~3 FirstBank Financial Services, McDonough, GA~~
~~4 Westsound Bank, Bremerton, WA~~
~~5 Suburban Federal Savings Bank, Crofton, MD~~
~~6 America West Bank, Layton, UT~~
~~7 Silver Falls Bank, Silverton, OR~~
~~8 Ocala National Bank, Ocala, FL~~
9 Sun Security Bank, Ellington, MO
10 Eastern Savings Bank, FSB, Hunt Valley, MD
~~11 Alliance Bank, Culver City, CA~~
~~12 FirstCity Bank, Stockbridge, GA~~
13 Chestatee State Bank, Dawsonville, GA
14 First Security National Bank, Norcross, GA
15 Ocean Bank, Miami, FL
16 Family Bank and Trust Co., Palos Hills, IL
17 Southern Community Bank, Fayetteville, GA
18 BankCherokee, Saint Paul, MN
19 First Tuskegee Bank, Tuskegee, AL
20 Federal Trust Bank, Sanford, FL
~~21 Pinnacle Bank, Beaverton, OR~~
22 Lake Country Community Bank, Morristown, MN
23 Mesa Bank, Mesa, AZ
24 Bank of Wyoming, Thermopolis, WY
25 1st American State Bank of Minnesota, Hancock, MN
26 First State Bank of Altus, Altus, OK
27 EvaBank, Eva, AL
~~28 Strategic Capital Bank, Champaign, IL~~
29 Ebank, Atlanta, GA
30 Polk County Bank, Johnston, IA
31 Parkway Bank, Rogers, AR
32 Security Bank of Gwinnett County, Suwanee, GA
33 State Bank of Park Rapids, Park Rapids, MN
34 Herrin Security Bank, Herrin, IL
~~35 Omni National Bank, Atlanta, GA~~
36 Northpointe Bank, Grand Rapids, MI
37 Towne Bank of Arizona, Mesa, AZ
38 Timberland Bank, El Dorado, AR
39 Blue Ridge Savings Bank, Inc., Asheville, NC
40 First Piedmont Bank, Winder, GA
41 Select Bank, Grand Rapids, MI
42 Oxford Bank, Oxford, MI
43 Security Bank of North Metro, Woodstock, GA
44 MetroPacific Bank, Irvine, CA
45 Earthstar Bank, Southampton, PA
46 Neighborhood Community Bank, Newnan, GA
47 The Home Savings and Loan Company, Youngstown, OH
~~48 Heritage Community Bank, Glenwood, IL~~
49 Vineyard Bank, NA, Rancho Cucamonga, CA
50 Community Bank of Lemont, Lemont, IL
51 Mainstreet Bank, Forest Lake, MN
52 Mutual Bank, Harvey, IL
~~53 Freedom Bank of Georgia, Commerce, GA~~
54 Newton County Loan & Savings FSB, Goodland, IN
55 Riverside Bank, Cape Coral, FL
~~56 BankUnited, Coral Gables, FL~~
~~57 American Sterling Bank, Sugar Creek, MO~~
58 The Park Avenue Bank, New York, NY
59 First Commerce Community Bank, Douglasville, GA
60 Centennial Bank, Ogden, UT
61 Warren Bank, Warren, MI
62 Peoples First Community Bank, Panama City, FL
63 Corus Bank, Chicago, IL
64 Butler Bank, Lowell, MA

SF Bay Area April Home Prices Flat but Down Over 40% From April 2008

2009-05-22T14:10:00.000-07:00

Today the SJ Mercury News reported April home sales for the San Francisco Bay Area are leveling off but down over 40% year-over-year.

Median prices are down 41.3% overall over April 2008 but they have been flat for the past four months.

Excerpts:

Multiple offers for under-$500,000 listings are common, and many of those properties sell for more than their asking prices.
The price trend for Santa Clara County condos and townhouses was similar to that for houses. The median price of condos sold last month was $255,000, up from $230,000 in March, but down 45 percent from a year earlier.
DataQuick reported that one reason median prices are flattening is that post-foreclosure properties — which are usually cheaper — make up a smaller proportion of home sales.

April home sales

Data below is for resale houses, unless noted.

County or area	Number sold	Change from April 2008	Median price	Change from April 2008
Alameda	1,108	41.9%	$303,820	-39.2%
Contra Costa	1,386	49.4%	$220,500	-42.7%
Marin	130	-21.2%	$743,500	-20.5%
Napa	82	1.2%	$300,500	-38.0%
San Francisco	197	-24.2%	$650,000	-23.5%
San Mateo	366	-19.4%	$550,000	-22.0%
Santa Clara	1,171	26.7%	$435,000	-37.8%
Santa Cruz	138	7.0%	$415,000	-33.6%
Solano	635	77.4%	$189,500	-40.6%
Sonoma	435	24.3%	$300,000	-28.6%
Bay Area	5,510	28.1%	$307,434	-42.0%
Santa Clara condos	318	1.3%	$255,000	-45.4%
Bay Area condos	1,084	1.4%	$223,642	-51.4%
Santa Clara all	1,606	11.5%	$405,000	-34.1%
Bay Area all	7,139	13.1%	$304,000	-41.3%

Santa Cruz County is not included in the Bay Area totals.
Data based on completed sales of previously owned single-family houses or condos as recorded by counties in April 2009.
The Bay Area and Santa Clara County figures are for new and resale houses and condos, combined.

Source: MDA DataQuick & SJ Mercury News

Westsound Bank Closes, Corus Teetering

2009-05-21T03:05:00.000-07:00

On May 8th, Westsound Bank of Bremerton, WA was closed by the Washington Department of Financial Institutions. The nine branches were reopened on May 11th as new branches of Kitsap Bank of Port Orchard, WA. Customer deposits were approximately $304.5 million including $9.4 million in brokered deposits. The cost to the FDIC is estimated at $108 million, or 35 cents on the dollar.

Westsound Bank, the 33rd bank to close this year, was number 4 on my list of Banks Most Likely to Close in 2009. The top 8 on the list have now all shut their doors. This list, which has less than 1% of all FDIC insured banks has captured 45% of the closings this year.

One bank I am adding to the list now is Corus Bank of Chicago, IL. The bank reported a first quarter loss of $285 million. That's $5.31 per share and the stock currently trades at 58 cents. In early April the company's auditor expressed doubts in the banks ability to continue as a "going concern" and in late April the CEO resigned. Their loan portfolio has blown up. More than half of their loans are non-performing. Foreclosed properties were up to $499 million by the end of March. The bank is under special oversight and has until June 18th to raise more capital.

Here's my current list of the 50 63 Banks Most Likely to Close in 2009.

~~1 Magnet Bank, Salt Lake City, UT~~
~~2 Citizens Community Bank, Ridgewood, NJ~~
~~3 FirstBank Financial Services, McDonough, GA~~
~~4 Westsound Bank, Bremerton, WA~~
~~5 Suburban Federal Savings Bank, Crofton, MD~~
~~6 America West Bank, Layton, UT~~
~~7 Silver Falls Bank, Silverton, OR~~
~~8 Ocala National Bank, Ocala, FL~~
9 Sun Security Bank, Ellington, MO
10 Eastern Savings Bank, FSB, Hunt Valley, MD
~~11 Alliance Bank, Culver City, CA~~
~~12 FirstCity Bank, Stockbridge, GA~~
13 Chestatee State Bank, Dawsonville, GA
14 First Security National Bank, Norcross, GA
15 Ocean Bank, Miami, FL
16 Family Bank and Trust Co., Palos Hills, IL
17 Southern Community Bank, Fayetteville, GA
18 BankCherokee, Saint Paul, MN
19 First Tuskegee Bank, Tuskegee, AL
20 Federal Trust Bank, Sanford, FL
~~21 Pinnacle Bank, Beaverton, OR~~
22 Lake Country Community Bank, Morristown, MN
23 Mesa Bank, Mesa, AZ
24 Bank of Wyoming, Thermopolis, WY
25 1st American State Bank of Minnesota, Hancock, MN
26 First State Bank of Altus, Altus, OK
27 EvaBank, Eva, AL
28 Strategic Capital Bank, Champaign, IL
29 Ebank, Atlanta, GA
30 Polk County Bank, Johnston, IA
31 Parkway Bank, Rogers, AR
32 Security Bank of Gwinnett County, Suwanee, GA
33 State Bank of Park Rapids, Park Rapids, MN
34 Herrin Security Bank, Herrin, IL
~~35 Omni National Bank, Atlanta, GA~~
36 Northpointe Bank, Grand Rapids, MI
37 Towne Bank of Arizona, Mesa, AZ
38 Timberland Bank, El Dorado, AR
39 Blue Ridge Savings Bank, Inc., Asheville, NC
40 First Piedmont Bank, Winder, GA
41 Select Bank, Grand Rapids, MI
42 Oxford Bank, Oxford, MI
43 Security Bank of North Metro, Woodstock, GA
44 MetroPacific Bank, Irvine, CA
45 Earthstar Bank, Southampton, PA
46 Neighborhood Community Bank, Newnan, GA
47 The Home Savings and Loan Company, Youngstown, OH
~~48 Heritage Community Bank, Glenwood, IL~~
49 Vineyard Bank, NA, Rancho Cucamonga, CA
50 Community Bank of Lemont, Lemont, IL
51 Mainstreet Bank, Forest Lake, MN
52 Mutual Bank, Harvey, IL
~~53 Freedom Bank of Georgia, Commerce, GA~~
54 Newton County Loan & Savings FSB, Goodland, IN
55 Riverside Bank, Cape Coral, FL
56 BankUnited, Coral Gables, FL
~~57 American Sterling Bank, Sugar Creek, MO~~
58 The Park Avenue Bank, New York, NY
59 First Commerce Community Bank, Douglasville, GA
60 Centennial Bank, Ogden, UT
61 Warren Bank, Warren, MI
62 Peoples First Community Bank, Panama City, FL
63 Corus Bank, Chicago, IL

Current Libor Rates

2009-05-13T09:21:00.000-07:00

This table shows LIBOR rates are down significantly from a year ago.

Updated 5/6/2009	This week	Month ago	Year ago
1 Month LIBOR Rate	0.40	0.45	2.51
3 Month LIBOR Rate	0.99	1.12	2.68
6 Month LIBOR Rate	1.54	1.66	2.83
1 Year LIBOR Rate	1.78	1.95	2.99

See Libor Rates at a Glance for current rates and graphs.

*==> Very Best CD Rates with FDIC <== *

SF Bay Area Homes under $100K

2009-05-10T11:16:00.000-07:00

Low priced homes are available in the San Francisco Bay Area. You don't have to go to Detroit to find a home priced between $50,000 and $100,000. There is a direct line from Bart to downtown San Francisco (see bart map below)

According to ZipRealty, there are 57 homes in Antioch, Bay Point and Pittsburg that are under $100,000.

Below is a random sample of 10 of the properties

1) $52,000, 56 INLET DRIVE, Bay Point, 94565

Beds: 2 | Baths: 1 | Lot Size: 5,000 Sq. Ft.
Year Built: 1952 | Listing Date: 02/10/09

2) $79,900, 4/2 SFR in Antioch, CA: last sold for $128K in 2008

3) $58,900; 3 LANCASTER CIR #111, Bay Point, CA 94565;

Beds: 2 | Sq. Ft.: 884 | Lot Size: N/A (Condo)
Baths: 2 |Built: 1989 | $/Sq.Ft.: $67 List Date: 05/04/09
On Market: 6 days | Foreclosure

4) $82,000, 3/2 SFR in Pittsburg, CA: last sold for $261K in 2008

5) $99,000, 2/1 SFR in Bay Point, CA: last sold for $180K in 2006

6) $69,900, 3/1 SFR in Bay Point, CA: last sold for $127K in 2006

7) $99,900, 3/2 Townhouse in Bay Point, CA: last sold for $368K in 2008

8) $84,900, 3/2 SFR in Antioch, CA: last sold for $123K in 2009

9) $64,000, 2/1 SFR in Pittsburg, CA: last sold for $89K in 1996

10) $54,900, 2/1 SFR in Pittsburg, CA: last sold for $67K in 2008

San Francisco Bay Area BART Map

Click map for larger image

Sell Vancouver Real Estate

2009-05-04T14:11:00.000-07:00

I had the opportunity to spend a few days in Vancouver, BC at the end of April. While the single family market did not seem to be overbuilt, the multi-family market appears to be. Noticeably absent from the market were sellers. When everyone is trying to buy, that is the time to sell.

Vancouver is host to the Winter Olympics and everyone seems to think that they can make a killing renting out apartments, condos and even whole homes during the games. An asking price of $200 to $250 Canadian dollars per person per night seems to be fairly typical. Visitors staying longer may get down to $1000 per week (per person). All the entrepreneurs in town are trying to get their property into top shape.

The important thing to realize is that these expectations are already built into the market. The housing bubble in Vancouver hasn't burst yet. But it will. Canadians should not think that they will escape the collapse that has affected such diverse cities as London, Miami, Hong Kong, Shanghai and Los Angeles. Anyone with investment property in Vancouver should sell now. The time will never be better.

And don't roll your money into more real estate. Spend it, enjoy it, give it to the poor. If you don't know what to do with it, you could always give some to me. :) Many who don't sell this year will find it impossible to sell next year and may find themselves losing everything to foreclosure. Learn a lesson from the contrarians, sell when everyone else is buying, buy when there is panic in the streets.

11 Bank Closures in 5 Weeks Cost $3 Billion

2009-05-02T14:36:00.000-07:00

The FDIC has closed 11 banks in the past 5 weeks. In addition, the National Credit Union Administration closed one Florida Credit Union. The Eastern Financial Florida Credit Union, with 30 offices, was closed on April 24th. Space Coast Credit Union took over operations of the $1.6 billion in assets.

On April 10th, Cape Fear Bank of Wilmington, NC was closed. The eight branches were closed less than 2 months after the bank was hit with a cease and desist order from the FDIC. First Federal Savings and Loan of Charleston, SC will take over approximately $403 million in deposits. The cost to the FDIC is estimated at $131 million, or 33 cents on the dollar.

On April 10th, the FDIC also closed down New Frontier Bank of Greeley, CO. The bank had received a cease and desist order approximately 4 months prior to the closure. Depositors at the three locations in Greeley, Windsor and Longmont had approximately $1.5 billion in the bank and were given 30 days to transfer it to other banks. The estimated cost to the FDIC is $670 million or 45 cents on the dollar.

On Friday, April 17th, the five branches of American Sterling Bank of Sugar Creek, MO were closed. The three Kansas City area branches reopened Saturday as Metcalf Bank. The other two branches in Arizona and California reopened Monday, April 20th. American Sterling had deposits of $171.9 million and the closure is expected to cost the FDIC $42 million, or 24 cents per dollar deposited. American Sterling had recently been added as number 57 on my list of banks most likely to close in 2009.

On the same day, Great Basin Bank of Elko, NV was closed. The five branches were all acquired by Nevada State Bank which will manage the $221.4 million in deposits. Nevada State Bank also took over Silver State Bank last fall. Nevada State Bank is a wholly owned subsidiary of Zions Bancorporation. The estimated cost to the FDIC insurance fund is $42 million or 19 cents per dollar on deposit.

A week ago, American Southern Bank of Kennesaw, Georgia was closed own and its two branches were taken over by Bank of North Georgia. American Southern had been playing with hot brokered deposits. The FDIC will pay off $48.7 million in brokered deposits and Bank of North Georgia got the other $55.6 million in local deposits. The estimated cost to the insurance fund is $41.9 million, or 40 cents per dollar on deposit.

Also last week, Heritage Bank of Farmington Hills, MI closed. Level One Bank took over the three branches. Heritage Bank had $151.7 million in deposits including an estimated $50 million in brokered deposits. The estimated cost to the FDIC insurance fund is $71.3 million, a which is 47 cents per dollar on deposit.

Causing some confusion the "First Bank of Beverly Hills" was taken over by the FDIC. The First Bank of Beverly Hills doesn't actually have a branch in Beverly Hills, but is based in Calabasas, CA. There is a First Bank in Beverly Hills, but that is a branch of St. Louis based First Banks, Inc. which is trying very hard to reassure customers that they are still open. First Bank of Beverly Hills once did have an office in Beverly Hills, but the St. Louis bank bought it.

The Calabasas based bank had deposits of approximately $1 billion at their one location which has now been shuttered. The FDIC has cut checks to the depositors at a cost to the insurance fund of $394 million, or 39 cents per dollar on deposit.

And last week, First Bank of Idaho closed its seven branches just nine days after receiving a cease and desist order from the FDIC. and turned them over to US Bank. Three of the branches were operating under the name Bank of the Tetons. The seven branches will add to the 90 offices US Bank has in Idaho and 14 offices in Wyoming. First Bank of Idaho had $374 million in deposits on December 31, 2008 which had dwindled to $338 million in deposits at the time of the closure including $112.8 million in brokered deposits. William Ruberry, a spokesman for the Office of Thrift Supervision, told the Idaho Mountain Express that his agency closed First Bank of Idaho because the bank was losing $2.7 million per day and was in danger of running out of cash by the end of the month. The closure will cost the FDIC an estimated $191.2 million or 57 cents for every dollar deposited.

Yesterday, regulators shut down three more banks.

Silverton Bank of Atlanta, GA had $3.3 billion in deposits was a wholesale bank not a retail operation. It operated six regional offices. The FDIC set up a bridge bank, called Silverton Bridge Bank, NA to allow the 1,400 client banks in 44 states to continue operations with the least amount of disruption. The closure of Silverton bank is expected to cost the insurance fund $1.3 billion or 39 cents per dollar on deposit. TIB - The Independent BankersBank of Irving, TX will manage the bridge bank.

Citizens Community Bank, with one office in Ridgewood, NJ was also closed yesterday. The bank will reopen Monday as a branch of New Jersey Community Bank. The small Citizens Community bank with $43.7 million in deposits was number 2 on my list of Banks Most Likely to close in 2009. The estimated cost to the FDIC insurance fund is $18.1 million or 41 cents per dollar deposited.

Also closed yesterday was America West Bank of Layton, Utah. America West had three offices and deposits of $284.1 million. They were number 6 on my list. Cache Valley Bank will take over all of the deposits of America West. The cost to the insurance fund is estimated at $119.4 million or 42 cents per dollar on deposit.

In all, 11 banks were closed in the past 5 weeks and the FDIC had to pony up anywhere from 19 cents to 57 cents per dollar on deposit. The total is over $3 billion over the past 5 weeks. This compares with 5 bank closings during the month of March costing 11 to 36 cents per dollar deposited. Clearly, the condition of the banks is deteriorating more quickly than the regulators can close them down.

Seven of the top 10 banks on my list have now been shut down. To reflect the deteriorating condition, I am adding three more banks to my list. The new banks are from Utah, Michigan and Florida.

Here's my current list of the 50 62 Banks Most Likely to Close in 2009.

~~1 Magnet Bank, Salt Lake City, UT~~
~~2 Citizens Community Bank, Ridgewood, NJ~~
~~3 FirstBank Financial Services, McDonough, GA~~
4 Westsound Bank, Bremerton, WA
~~5 Suburban Federal Savings Bank, Crofton, MD~~
~~6 America West Bank, Layton, UT~~
~~7 Silver Falls Bank, Silverton, OR~~
~~8 Ocala National Bank, Ocala, FL~~
9 Sun Security Bank, Ellington, MO
10 Eastern Savings Bank, FSB, Hunt Valley, MD
~~11 Alliance Bank, Culver City, CA~~
~~12 FirstCity Bank, Stockbridge, GA~~
13 Chestatee State Bank, Dawsonville, GA
14 First Security National Bank, Norcross, GA
15 Ocean Bank, Miami, FL
16 Family Bank and Trust Co., Palos Hills, IL
17 Southern Community Bank, Fayetteville, GA
18 BankCherokee, Saint Paul, MN
19 First Tuskegee Bank, Tuskegee, AL
20 Federal Trust Bank, Sanford, FL
~~21 Pinnacle Bank, Beaverton, OR~~
22 Lake Country Community Bank, Morristown, MN
23 Mesa Bank, Mesa, AZ
24 Bank of Wyoming, Thermopolis, WY
25 1st American State Bank of Minnesota, Hancock, MN
26 First State Bank of Altus, Altus, OK
27 EvaBank, Eva, AL
28 Strategic Capital Bank, Champaign, IL
29 Ebank, Atlanta, GA
30 Polk County Bank, Johnston, IA
31 Parkway Bank, Rogers, AR
32 Security Bank of Gwinnett County, Suwanee, GA
33 State Bank of Park Rapids, Park Rapids, MN
34 Herrin Security Bank, Herrin, IL
~~35 Omni National Bank, Atlanta, GA~~
36 Northpointe Bank, Grand Rapids, MI
37 Towne Bank of Arizona, Mesa, AZ
38 Timberland Bank, El Dorado, AR
39 Blue Ridge Savings Bank, Inc., Asheville, NC
40 First Piedmont Bank, Winder, GA
41 Select Bank, Grand Rapids, MI
42 Oxford Bank, Oxford, MI
43 Security Bank of North Metro, Woodstock, GA
44 MetroPacific Bank, Irvine, CA
45 Earthstar Bank, Southampton, PA
46 Neighborhood Community Bank, Newnan, GA
47 The Home Savings and Loan Company, Youngstown, OH
~~48 Heritage Community Bank, Glenwood, IL~~
49 Vineyard Bank, NA, Rancho Cucamonga, CA
50 Community Bank of Lemont, Lemont, IL
51 Mainstreet Bank, Forest Lake, MN
52 Mutual Bank, Harvey, IL
~~53 Freedom Bank of Georgia, Commerce, GA~~
54 Newton County Loan & Savings FSB, Goodland, IN
55 Riverside Bank, Cape Coral, FL
56 BankUnited, Coral Gables, FL
~~57 American Sterling Bank, Sugar Creek, MO~~
58 The Park Avenue Bank, New York, NY
59 First Commerce Community Bank, Douglasville, GA
60 Centennial Bank, Ogden, UT
61 Warren Bank, Warren, MI
62 Peoples First Community Bank, Panama City, FL

Current Libor Rates

2009-04-18T13:09:00.000-07:00

Below is a table showing the current LIBOR rates. For graphs and charts, see Current and Historical Libor Rates at at Glance.

LIBOR is the London Interbank Offered Rate. It is a daily reference rate based on the interest rates banks in the London wholesale money market (or interbank market) offer to lend unsecured funds to each other. LIBOR is usually slightly higher than the London Interbank Bid Rate (LIBID). LIBID is the rate the same banks are prepared to accept deposits.Yield Curve graph courtesy of bloomberg.com

Updated 4/15/2009	This week	Month ago	Year ago
1 Month LIBOR Rate	0.45	0.56	2.72
3 Month LIBOR Rate	1.12	1.30	2.72
6 Month LIBOR Rate	1.66	1.88	2.72
1 Year LIBOR Rate	1.95	2.23	2.64

Five Bank Closings in March

2009-04-08T18:11:00.000-07:00

The FDIC closed five banks during the month of March. Plus there were two credit unions that were taken over by the National Credit Union Association.

Let's start with the credit unions. The U.S. Central Federal Credit Union of Lenexa, Kansas was placed into conservatorship on March 20th. U.S. Central was a corporate credit union with $34 billion in assets and just 26 corporate members. They did not have any retail members.

The Western Corporate (WesCorp) Federal Credit Union of San Dimas, California was placed into conservatorship on the same day. WesCorp did have retail customers. They had approximately 1,100 members and approximately $23 billion in assets.

Among the banks, the FDIC closed down Freedom Bank of Georgia, of Commerce, Georgia on March 6th. The bank was a late addition to my list in February, coming in at number 56. Freedom Bank had deposits of $161 million at four branches. They reopened Monday, March 9th as branches of Northeast Georgia Bank of Lavonia, Georgia. The estimated cost to the FDIC is $36.2 million, or 22 cents for each dollar on deposit.

Two weeks later, the FDIC closed down another Georgia bank, FirstCity Bank of Stockbridge. The FDIC was unable to find a buyer for FirstCity which had deposits of $278 million at three branches. Checks were mailed out to the depositors at an estimated cost to the FDIC of $100 million or 36 cents for each dollar on deposit. FirstCity was number 13 on my list of banks most likely to close in 2009.

The FDIC also closed Colorado National Bank of Colorado Springs. Colorado National's four branches reopened Monday, March 23rd as branches of Herring Bank headquartered in Amarillo, Texas. The cost to the FDIC insurance fund on this closing is estimated at $9 million on $82.7 million of deposits or only 11 cents per dollar on deposit.

The same day, the FDIC closed Teambank, NA of Paola, Kansas. Teambank had 17 branch offices and $474 million in deposits. The branches were taken over by Great Southern Bank of Springfield, Missouri. The FDIC estimates a cost to the insurance fund of $98 million or 21 cents per dollar on deposit.

A week later, the FDIC closed a third Georgia bank, Omni National Bank of Atlanta. Omni was number 37 on my list. Like FirstCity, the FDIC was unable to find a buyer for the bank. But I suspect the FDIC has been getting a number of complaints about bounced checks from the FirstCity shutdown. So this time, they entered into an agreement with SunTrust Bank to run the six former Omni branches for 30 days to give customers time to close their checking accounts in an orderly manner. The FDIC will be probably be doing more closings like this in the future. Omni had $796.8 million in deposits and the estimated cost to the insurance fund is $290 million or 36 cents per dollar on deposit.

As you can see, despite quickening pace that resulted in the closing of 21 banks in the first quarter of 2009, the FDIC is still not able to keep up with the banking crisis. The closings are getting progressively more expensive per dollar on deposit. Many more banks will need to be closed before the year is over.

As I've reviewed my list of the banks most likely to close in 2009, I've spotted a few errors. Namely, three banks on my original list had already failed in November and December of 2008. So I'm dropping those from the list.

I'm also expanding the list to include some banks that have gotten significantly worse in recent months. My additions to the list include another bank in Georgia, two in Florida, and one each in Indiana, Missouri and New York.

Here's my current list of the 50 59 Banks Most Likely to Close in 2009.

~~1 Magnet Bank, Salt Lake City, UT~~
2 Citizens Community Bank, Ridgewood, NJ
~~3 FirstBank Financial Services, McDonough, GA~~
4 Westsound Bank, Bremerton, WA
~~5 Suburban Federal Savings Bank, Crofton, MD~~
6 America West Bank, Layton, UT
7 Silver Falls Bank, Silverton, OR
8 Ocala National Bank, Ocala, FL
9 Sun Security Bank, Ellington, MO
10 Eastern Savings Bank, FSB, Hunt Valley, MD
11 Alliance Bank, Culver City, CA
12 FirstCity Bank, Stockbridge, GA
13 Chestatee State Bank, Dawsonville, GA
14 First Security National Bank, Norcross, GA
15 Ocean Bank, Miami, FL
16 Family Bank and Trust Co., Palos Hills, IL
17 Southern Community Bank, Fayetteville, GA
18 BankCherokee, Saint Paul, MN
19 First Tuskegee Bank, Tuskegee, AL
20 Federal Trust Bank, Sanford, FL
~~21 Pinnacle Bank, Beaverton, OR~~
22 Lake Country Community Bank, Morristown, MN
23 Mesa Bank, Mesa, AZ
24 Bank of Wyoming, Thermopolis, WY
25 1st American State Bank of Minnesota, Hancock, MN
26 First State Bank of Altus, Altus, OK
27 EvaBank, Eva, AL
28 Strategic Capital Bank, Champaign, IL
29 Ebank, Atlanta, GA
30 Polk County Bank, Johnston, IA
31 Parkway Bank, Rogers, AR
32 Security Bank of Gwinnett County, Suwanee, GA
33 State Bank of Park Rapids, Park Rapids, MN
34 Herrin Security Bank, Herrin, IL
35 Omni National Bank, Atlanta, GA
36 Northpointe Bank, Grand Rapids, MI
37 Towne Bank of Arizona, Mesa, AZ
38 Timberland Bank, El Dorado, AR
39 Blue Ridge Savings Bank, Inc., Asheville, NC
40 First Piedmont Bank, Winder, GA
41 Select Bank, Grand Rapids, MI
42 Oxford Bank, Oxford, MI
43 Security Bank of North Metro, Woodstock, GA
44 MetroPacific Bank, Irvine, CA
45 Earthstar Bank, Southampton, PA
46 Neighborhood Community Bank, Newnan, GA
47 The Home Savings and Loan Company, Youngstown, OH
~~48 Heritage Community Bank, Glenwood, IL~~
49 Vineyard Bank, NA, Rancho Cucamonga, CA
50 Community Bank of Lemont, Lemont, IL
51 Mainstreet Bank, Forest Lake, MN
52 Mutual Bank, Harvey, IL
~~53 Freedom Bank of Georgia, Commerce, GA~~
54 Newton County Loan & Savings FSB, Goodland, IN
55 Riverside Bank, Cape Coral, FL
56 BankUnited, Coral Gables, FL
57 American Sterling Bank, Sugar Creek, MO
58 The Park Avenue Bank, New York, NY
59 First Commerce Community Bank, Douglasville, GA

Centex and Pulte Announce Merger

2009-04-08T06:45:00.000-07:00

Homebuilder giants Pulte Home (PHM) and Centex (CTX) announced a merger today in which Pulte will pay $1.3 billion in stock for Centex to create the nation's largest homebuilder, eclipsing DR Horton (DHI).

While $1.3 billion is a premium to where Centex stock was trading, it matches what Centex reported last quarter as net tangible assets. For Pulte, it is an all stock deal which will not require the commitment of real cash.

Both companies continue to lose money. Investors in either of these two companies should not let the merger announcement distract them from the results to be reported for the three months ending March 31, 2008.

Single Family Home Prices, Adjusted for Inflation, Down 1.6% Since 1979

2009-03-27T06:36:00.000-07:00

The average home price has lost ground to inflation over the last 30 years. This graph of single family home prices adjusted for Inflation shows prices have lost ground over the peak price in 1979.

Click Chart courtesy of Chartoftheday.com for large image

The chart shows prices, adjusted for inflation, are now below 1979 levels! According to chartoftheday:

a home buyer who bought the median priced single-family home at the 1979 peak has actually seen that home lose value, a 1.6% loss!

Of course, buyers who purchases their homes between 1980 and the mid 1990s stand a good chance of being ahead of inflation with their purchase. When you add in the savings on rent plus the tax benefits, home ownership looks even better.

The lesson from the chart is don't buy a home (or any asset for that matter) after prices have gone "parabolic." We like to buy homes after major declines in the chart. No matter how you look at it, today is a much better time to buy a home than two years ago.

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$8,000 Home Buyer Federal Tax Credit at a Glance

2009-03-07T16:45:00.000-08:00

A tax credit of up to $8,000 is now available for qualified first-time home buyers purchasing a principal residence on or after January 1, 2009 and before December 1, 2009. Unlike the tax credit enacted in 2008, the new credit does not have to be repaid. Only homes purchased on or after January 1, 2009 and before December 1, 2009 are eligible.

Here is a short summary of the Federal Tax Credit.

$8,000 Home Buyer Tax Credit at a Glance

·The tax credit is for first-time home buyers only.

·The tax credit does not have to be repaid.

·The tax credit is equal to 10 percent of the home’s purchase price up to a maximum of $8,000.

·The credit is available for homes purchased on or after January 1, 2009 and before December 1, 2009.

·Single taxpayers with incomes up to $75,000 and married couples with incomes up to $150,000 qualify for the full tax credit.

·First-time home buyers who purchased a principal residence on or after April 9, 2008 and before January 1, 2009 may qualify for a $7,500 tax credit.

The law defines "first-time home buyer" as a buyer who has not owned a principal residence during the three-year period prior to the purchase. For married taxpayers, the law tests the homeownership history of both the home buyer and his/her spouse.

Two More Bank Closings

2009-02-28T09:21:00.000-08:00

The FDIC closed two more banks on Friday. Heritage Community Bank, in Glenwood Illinois was closed at a cost to the FDIC fund estimated at $42.6 million dollars which is 18 cents for each dollar on deposit. The four branches of Heritage Community will reopen Monday as MB Financial Bank.

I added Heritage Community Bank as number 51 to my list last week as it became apparent that the proposed sale to First Community of Joliet wasn't likely to be completed.

The FDIC also closed Security Savings Bank in Henderson, Nevada. The two branches will reopen Monday as part of Bank of Nevada. The cost to FDIC is estimated at $59.1 million dollars which is 25 cents for each dollar on deposit.

Despite a quickening pace of closures, the FDIC list of troubled banks has grown 47% in the last quarter from 171 to 252. The details of the list are not released, but researchers at Foresight Analytics have a similar list with 275 banks. Foresight has 49 Georgia banks on the list, 35 banks in Florida, 32 in Illinois and 14 in California. As a result, I am adding 4 more banks to my list of banks most likely to close in 2009. Two banks are from Illinois, one is from Georgia and one from Minnesota.

Debuting at 53 on the list is Community Bank of Lemont. Despite raising $3 million in capital in September, the bank ended 2008 with a Texas ratio of 429%.

I've also cleaned up the list after I noticed that I had listed First Piedmont Bank twice.

Here's my current list of the 50 56 Banks Most Likely to Close in 2009.

~~1 Magnet Bank, Salt Lake City, UT~~
2 Citizens Community Bank, Ridgewood, NJ
~~3 FirstBank Financial Services, McDonough, GA~~
4 Westsound Bank, Bremerton, WA
~~5 Suburban Federal Savings Bank, Crofton, MD~~
6 America West Bank, Layton, UT
7 The Community Bank, Loganville, GA
~~8 Silver Falls Bank, Silverton, OR~~
~~9 Ocala National Bank, Ocala, FL~~
10 Sun Security Bank, Ellington, MO
11 Eastern Savings Bank, FSB, Hunt Valley, MD
~~12 Alliance Bank, Culver City, CA~~
13 FirstCity Bank, Stockbridge, GA
14 Chestatee State Bank, Dawsonville, GA
15 First Security National Bank, Norcross, GA
16 Ocean Bank, Miami, FL
17 First Georgia Community Bank, Jackson, GA
18 Family Bank and Trust Co., Palos Hills, IL
19 Southern Community Bank, Fayetteville, GA
20 BankCherokee, Saint Paul, MN
21 First Tuskegee Bank, Tuskegee, AL
22 Federal Trust Bank, Sanford, FL
~~23 Pinnacle Bank, Beaverton, OR~~
24 Lake Country Community Bank, Morristown, MN
25 Mesa Bank, Mesa, AZ
26 Bank of Wyoming, Thermopolis, WY
27 1st American State Bank of Minnesota, Hancock, MN
28 First State Bank of Altus, Altus, OK
29 EvaBank, Eva, AL
30 Strategic Capital Bank, Champaign, IL
31 Ebank, Atlanta, GA
32 Polk County Bank, Johnston, IA
33 Parkway Bank, Rogers, AR
34 Security Bank of Gwinnett County, Suwanee, GA
35 State Bank of Park Rapids, Park Rapids, MN
36 Herrin Security Bank, Herrin, IL
37 Omni National Bank, Atlanta, GA
38 Northpointe Bank, Grand Rapids, MI
39 Towne Bank of Arizona, Mesa, AZ
40 Haven Trust Bank, Duluth, GA
41 Timberland Bank, El Dorado, AR
42 Blue Ridge Savings Bank, Inc., Asheville, NC
43 First Piedmont Bank, Winder, GA
44 Select Bank, Grand Rapids, MI
45 Oxford Bank, Oxford, MI
46 Security Bank of North Metro, Woodstock, GA
47 MetroPacific Bank, Irvine, CA
48 Earthstar Bank, Southampton, PA
49 Neighborhood Community Bank, Newnan, GA
50 The Home Savings and Loan Company, Youngstown, OH
~~51 Heritage Community Bank, Glenwood, IL~~
52 Vineyard Bank, NA, Rancho Cucamonga, CA
53 Community Bank of Lemont, Lemont, IL
54 Mainstreet Bank, Forest Lake, MN
55 Mutual Bank, Harvey, IL
56 Freedom Bank of Georgia, Commerce, GA

New Home Sales Plummet

2009-02-26T17:21:00.000-08:00

A number of statistics came out this week on housing and they are all bad. Existing home sales are down. Existing home prices are down. New home sales are down. New home prices are down. No area of the country and no segment of the market seems to be running counter to the heavy downward trend.

The Census Department reported today that sales of new single family homes in January were down another 10% from December and down 48% from January of last year. The seasonally adjusted annual rate was just 309,000. That's less than half of the 776,000 average rate for 2007 and down about 70% from the 10-year average (1998-2008) of 992,000 million new single family homes per year.

Let's break it down by price range. In the following chart, you can see that new home sales at all price levels below $400,000 are down.

But the luxury end of the market is especially down. Many home buyers looking at homes priced at over $400,000 need "Jumbo" mortgages. The next chart illustrates how far the top end of the market has fallen.

Many homes over $400,000 are considered "custom homes" and are built by small, independent builders who normally enjoy a comfortable profit margin. These small builders are getting hammered in this market. The profit margin is gone. Many new homes are being sold at a loss, if they can sell at all. Few people are shopping for new homes. It doesn't pay to staff a sales office. Most showings are by appointment only. If builders can find an interested purchaser, cancellations are high because move-up buyers can't sell their old homes. As fast as builders have tried to cut inventory, sales have dropped even faster. The average new home for sale has now been sitting empty for more than a year.

America's Emptiest, Most Abandoned Cities

2009-02-23T06:22:00.000-08:00

According to Forbes magazine, Las Vegas edged Detroit for the title of America's most abandoned city. Atlanta came in third, followed by Greensboro, N.C., and Dayton, Ohio.

Forbes rankings rankings of most abandoned cities uses a combination of rental and homeowner vacancy rates for the 75 largest metropolitan statistical areas in the country. They are based on Q4 2008 data released Feb. 3 by the Census Bureau. Each city was ranked on rental vacancies and housing vacancies. Forbes' final ranking is an average of the two.

Story Excerpts:

In 2007, Israeli billionaire Yitzhak Tshuva and partner Nochi Dankner paid $1.25 billion to buy a 34.5-acre site on the Strip, with plans to build an $8 billion mega-casino modeled after New York's Plaza Hotel. By November, the value of the lot had plummeted to $650 million--half what they paid for it. Groundbreaking on the casino has been pushed back to 2010, and today, the land may be worth less than the $625 million Tshuva and Dankner borrowed to buy it.

Detroit's problems run much deeper. Though its vacancy rates are marginally better than Sin City's, Motown has been on the empty side for decades. An industrial boomtown during the first half of the 20th century, Detroit's population swelled from 285,000 in 1900 to 990,000 in 1920, reaching a peak of 1.8 million in 1950.
But starting in the 1960s, Detroit began a precipitous decline. Detroit's population is now 900,000--half what it was in the middle of the century--and many of its neighborhoods languish in varying states of decay. Most scholars blame rapid suburbanization, outsourcing of manufacturing jobs, and federal programs they say exacerbated the situation by creating a culture of joblessness and dependency.

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Silver Falls Bank Closed

2009-02-21T07:20:00.000-08:00

Yesterday the FDIC and the Oregon Department of Consumer and Business Services closed Silver Falls Bank located in Silverton, Oregon. The bank's three branches will reopen Monday as new branches of Citizens Bank of Corvallis, Oregon. Silver Falls Bank was number 8 on my list of the 50 Banks Most Likely to Close in 2009. It marks the 14th bank closed this year.

Correction: I shouldn't have added First Piedmont Bank of Winder, Georgia as number 52 to my list because I already had it listed as number 43.

Banking Conditions Deteriorate

2009-02-20T01:29:00.000-08:00

Although this has been a workweek shortened by the President's Day federal holiday, more bank shutdowns by the FDIC are expected after the close of business today. At the beginning of the year, I posted a list of what I felt were the 50 banks most likely to fail in 2009. Thirteen banks have already failed in 2009 and 6 of those were on my list. New data is now available which shows considerable deterioration in the condition of our nation's banks and I would like to add three banks in particular to my list before the FDIC announces this week's closings.

The first addition I'd like to make, debuting at 51 on my list is Heritage Community Bank of Glenwood, Illinois. Heritage Community would have made my first list except that I thought that it had already changed hands. First Community Financial Partners, the holding company of First Community Bank of Joliet, announced on October 30, 2009 a letter of intent to acquire a major interest in Heritage Community Bank. That deal was expected to close by the end of 2008. It hasn't.

Meanwhile, Heritage Community's Texas ratio (a measure of loans more than 90 days delinquent over combined equity and reserves for loan losses) has exploded from 143.3% on September 30, 2008 to 514.2% by the end of the year. CEO John Saphir, who had hoped to retire by the end of 2008, tells Crain's Chicago Business, "We're in discussions with an equity investor group to increase the bank's capital and support its loan portfolio." With what may be the highest Texas ratio in the country, I don't expect those discussions to go far.

The second addition I'm making to the list is First Piedmont Bank of Windner, Georgia. Georgia has the nation's largest number of troubled banks, a fact that was trumpeted last Sunday on the cover of the Atlanta Journal-Constitution. The AJC listed 42 Georgia banks with Texas ratios over 100%. First on their list was FirstBank Financial Services which has already been closed. Second on their list is Omni National Bank, which is number 37 on my list. Third on their list is First Piedmont which I am bringing in at number 52. First Piedmont's Texas ratio rose from 189% to 373% during the final 3 months of 2008. Georgia banks were already running precariously, the cover story on the Sunday paper certainly didn't help things.

Georgia, Florida and Illinois have the largest number of troubled banks. I expect to be adding more banks from these three states to my list in the coming weeks. Unfortunately, I don't have any new data on Florida banks yet.

The third bank I'm adding to my list is Vineyard Bank of Rancho Cucamonga, California. The Califonia Department of Financial Institutions has been more aggressive than other states in shutting down troubled banks, so although Vineyard is not as bad off as banks in many other states, it's near the top of the list for banks in California. The FDIC is also getting its west coast office in Irvine, CA up to full speed, expecting to shut down more banks in that part of the country. While Vineyard is the only California bank I am adding this morning, Downey is not far behind.

So as we go into another FDIC Friday, here is my updated list of 50 53 Banks Most Likely to Close in 2009.

~~1 Magnet Bank, Salt Lake City, UT~~
2 Citizens Community Bank, Ridgewood, NJ
~~3 FirstBank Financial Services, McDonough, GA~~
4 Westsound Bank, Bremerton, WA
~~5 Suburban Federal Savings Bank, Crofton, MD~~
6 America West Bank, Layton, UT
7 The Community Bank, Loganville, GA
8 Silver Falls Bank, Silverton, OR
~~9 Ocala National Bank, Ocala, FL~~
10 Sun Security Bank, Ellington, MO
11 Eastern Savings Bank, FSB, Hunt Valley, MD
~~12 Alliance Bank, Culver City, CA~~
13 FirstCity Bank, Stockbridge, GA
14 Chestatee State Bank, Dawsonville, GA
15 First Security National Bank, Norcross, GA
16 Ocean Bank, Miami, FL
17 First Georgia Community Bank, Jackson, GA
18 Family Bank and Trust Co., Palos Hills, IL
19 Southern Community Bank, Fayetteville, GA
20 BankCherokee, Saint Paul, MN
21 First Tuskegee Bank, Tuskegee, AL
22 Federal Trust Bank, Sanford, FL
~~23 Pinnacle Bank, Beaverton, OR~~
24 Lake Country Community Bank, Morristown, MN
25 Mesa Bank, Mesa, AZ
26 Bank of Wyoming, Thermopolis, WY
27 1st American State Bank of Minnesota, Hancock, MN
28 First State Bank of Altus, Altus, OK
29 EvaBank, Eva, AL
30 Strategic Capital Bank, Champaign, IL
31 Ebank, Atlanta, GA
32 Polk County Bank, Johnston, IA
33 Parkway Bank, Rogers, AR
34 Security Bank of Gwinnett County, Suwanee, GA
35 State Bank of Park Rapids, Park Rapids, MN
36 Herrin Security Bank, Herrin, IL
37 Omni National Bank, Atlanta, GA
38 Northpointe Bank, Grand Rapids, MI
39 Towne Bank of Arizona, Mesa, AZ
40 Haven Trust Bank, Duluth, GA
41 Timberland Bank, El Dorado, AR
42 Blue Ridge Savings Bank, Inc., Asheville, NC
43 First Piedmont Bank, Winder, GA
44 Select Bank, Grand Rapids, MI
45 Oxford Bank, Oxford, MI
46 Security Bank of North Metro, Woodstock, GA
47 MetroPacific Bank, Irvine, CA
48 Earthstar Bank, Southampton, PA
49 Neighborhood Community Bank, Newnan, GA
50 The Home Savings and Loan Company, Youngstown, OH
51 Heritage Community Bank, Glenwood, IL
52 First Piedmont Bank, Windner, GA
53 Vineyard Bank, NA, Rancho Cucamonga, CA

Pasquinelli Homes Stops Building

2009-02-18T17:02:00.000-08:00

New home starts in January dropped by 16.8% from December and were down 56% below year-ago levels. Total housing starts sank to a 466,000 seasonally adjusted annual rate and single family home starts dropped to a 347,000 annual rate. This is down 79% from the peak rate three years ago. Read the full report

The sustainable annual rate for new single family home starts is around 1,000,000 homes per year. We got above that during the bubble and are paying for it now with foreclosures and empty inventory. I would not be surprised to see single family home starts drop to 250,000 for a 4-month average and 218,000 for a minimum. Home builder expectations are still near an all time low.

In the Midwest, new home starts are down 29% from December and 66% below one year ago. One Chicago-based builder, Pasquinelli Homes, confirmed Monday that they have halted all construction. Pasquinelli ranked as the nation's 24th largest builder in 2007. In addition to Chicago, they also have developments in Indiana, Ohio, Pennsylvania, West Virginia, the Carolinas, Georgia and Texas. Pasquinelli also does business under the name Patriot Homes. Bigbuilderonline

California Home Prices Continue Slide

2009-02-12T03:19:00.000-08:00

California home prices continue to slide. Eight chiefs of the nation's top banks appeared before Congress yesterday and agreed to hold off on home foreclosures for three weeks while the new administration tries to come up with a plan.

Financial Times story

The three week delay doesn't really hurt the banks because they already have more vacant foreclosed homes than they can sell. It scores them political points for agreeing to work with Congress while at the same time delaying the realized losses from showing up on their first quarter financial reports.

Somewhere around 60% of California's home sales are foreclosure related which is depressing prices. The market can only absorb about 15% of sales as foreclosures before prices begin to be affected. Even with the occasional delays like the three additional weeks agreed to by Chase, Bank of America and Wells Fargo, foreclosures will continue to dominate the market during 2009. I expect home prices will continue to slide in California for a while longer.

FDIC Closes 2 More Banks

2009-02-06T18:05:00.000-08:00

The FDIC closed two more banks today, bringing to 8 the number of banks closed in 2009. Both banks were on my list of 50 banks most likely to close in 2009. They were number 3 on my list, FirstBank Financial Services of McDonough, GA; and number 12 on my list, Alliance Bank of Culver City, CA.

FirstBank Financial is being taken over by Regions Bank. Alliance Bank is being taken over by California Bank and Trust.

Here's an update of my New Year's list again of 50 banks most likely to close in 2009:

~~1 Magnet Bank, Salt Lake City, UT~~
2 Citizens Community Bank, Ridgewood, NJ
~~3 FirstBank Financial Services, McDonough, GA~~
4 Westsound Bank, Bremerton, WA
~~5 Suburban Federal Savings Bank, Crofton, MD~~
6 America West Bank, Layton, UT
7 The Community Bank, Loganville, GA
8 Silver Falls Bank, Silverton, OR
~~9 Ocala National Bank, Ocala, FL~~
10 Sun Security Bank, Ellington, MO
11 Eastern Savings Bank, FSB, Hunt Valley, MD
~~12 Alliance Bank, Culver City, CA~~
13 FirstCity Bank, Stockbridge, GA
14 Chestatee State Bank, Dawsonville, GA
15 First Security National Bank, Norcross, GA
16 Ocean Bank, Miami, FL
17 First Georgia Community Bank, Jackson, GA
18 Family Bank and Trust Co., Palos Hills, IL
19 Southern Community Bank, Fayetteville, GA
20 BankCherokee, Saint Paul, MN
21 First Tuskegee Bank, Tuskegee, AL
22 Federal Trust Bank, Sanford, FL
23 Pinnacle Bank, Beaverton, OR
24 Lake Country Community Bank, Morristown, MN
25 Mesa Bank, Mesa, AZ
26 Bank of Wyoming, Thermopolis, WY
27 1st American State Bank of Minnesota, Hancock, MN
28 First State Bank of Altus, Altus, OK
29 EvaBank, Eva, AL
30 Strategic Capital Bank, Champaign, IL
31 Ebank, Atlanta, GA
32 Polk County Bank, Johnston, IA
33 Parkway Bank, Rogers, AR
34 Security Bank of Gwinnett County, Suwanee, GA
35 State Bank of Park Rapids, Park Rapids, MN
36 Herrin Security Bank, Herrin, IL
37 Omni National Bank, Atlanta, GA
38 Northpointe Bank, Grand Rapids, MI
39 Towne Bank of Arizona, Mesa, AZ
40 Haven Trust Bank, Duluth, GA
41 Timberland Bank, El Dorado, AR
42 Blue Ridge Savings Bank, Inc., Asheville, NC
43 First Piedmont Bank, Winder, GA
44 Select Bank, Grand Rapids, MI
45 Oxford Bank, Oxford, MI
46 Security Bank of North Metro, Woodstock, GA
47 MetroPacific Bank, Irvine, CA
48 Earthstar Bank, Southampton, PA
49 Neighborhood Community Bank, Newnan, GA
50 The Home Savings and Loan Company, Youngstown, OH

Mid-Atlantic Home Prices Slide

2009-02-02T09:13:00.000-08:00

A January 30th article in the New York Times points out that apartment rents are falling in Manhattan.

This follows a slow steady slide in home prices in the region.

Mid-Atlantic home prices did not get as inflated as Florida and California, but home prices there are falling following the national trend. New York is losing jobs related to the financial services industry. Washington DC employment is steady or rising. Both cities are expected to continue the downward trend in home prices for the next several months.

FDIC Closes 3 Banks Today

2009-01-30T16:05:00.000-08:00

The FDIC closed three banks today, bringing to 6 the number of banks closed in 2009. All three banks were on my list of 50 banks most likely to close in 2009. They were number 1 on my list, Magnet Bank of Salt Lake City, UT; number 5 on my list, Suburban Federal Savings Bank of Crofton, MD; and number 9 on my list, Ocala National Bank of Ocala, FL.

Suburban Federal Savings is being taken over by Bank of Essex. Ocala National is being taken over by CenterState Bank. In the case of Magnet Bank, the FDIC could not find an acquirer and depositors will be mailed checks for their balances on Monday.

It's worth looking at my New Year's list again of 50 banks most likely to close in 2009:

~~1 Magnet Bank, Salt Lake City, UT~~
2 Citizens Community Bank, Ridgewood, NJ
3 FirstBank Financial Services, McDonough, GA
4 Westsound Bank, Bremerton, WA
~~5 Suburban Federal Savings Bank, Crofton, MD~~
6 America West Bank, Layton, UT
7 The Community Bank, Loganville, GA
8 Silver Falls Bank, Silverton, OR
~~9 Ocala National Bank, Ocala, FL~~
10 Sun Security Bank, Ellington, MO
11 Eastern Savings Bank, FSB, Hunt Valley, MD
12 Alliance Bank, Culver City, CA
13 FirstCity Bank, Stockbridge, GA
14 Chestatee State Bank, Dawsonville, GA
15 First Security National Bank, Norcross, GA
16 Ocean Bank, Miami, FL
17 First Georgia Community Bank, Jackson, GA
18 Family Bank and Trust Co., Palos Hills, IL
19 Southern Community Bank, Fayetteville, GA
20 BankCherokee, Saint Paul, MN
21 First Tuskegee Bank, Tuskegee, AL
22 Federal Trust Bank, Sanford, FL
23 Pinnacle Bank, Beaverton, OR
24 Lake Country Community Bank, Morristown, MN
25 Mesa Bank, Mesa, AZ
26 Bank of Wyoming, Thermopolis, WY
27 1st American State Bank of Minnesota, Hancock, MN
28 First State Bank of Altus, Altus, OK
29 EvaBank, Eva, AL
30 Strategic Capital Bank, Champaign, IL
31 Ebank, Atlanta, GA
32 Polk County Bank, Johnston, IA
33 Parkway Bank, Rogers, AR
34 Security Bank of Gwinnett County, Suwanee, GA
35 State Bank of Park Rapids, Park Rapids, MN
36 Herrin Security Bank, Herrin, IL
37 Omni National Bank, Atlanta, GA
38 Northpointe Bank, Grand Rapids, MI
39 Towne Bank of Arizona, Mesa, AZ
40 Haven Trust Bank, Duluth, GA
41 Timberland Bank, El Dorado, AR
42 Blue Ridge Savings Bank, Inc., Asheville, NC
43 First Piedmont Bank, Winder, GA
44 Select Bank, Grand Rapids, MI
45 Oxford Bank, Oxford, MI
46 Security Bank of North Metro, Woodstock, GA
47 MetroPacific Bank, Irvine, CA
48 Earthstar Bank, Southampton, PA
49 Neighborhood Community Bank, Newnan, GA
50 The Home Savings and Loan Company, Youngstown, OH

Three other banks have also been closed by the FDIC in 2009. They are:
National Bank of Commerce, Berkeley, IL
Bank of Clark County, Vancouver, WA
First Centennial Bank, Redlands, CA

CNBC Bonus Bucks - Trivia Answers for Portfolio Challenge Questions

2009-01-16T08:17:00.000-08:00

CNBC's Million Dollar Portfolio Challenge is back. Trading started November 17th, 2008. Hours: Monday 6:00 a.m. to Friday 4:00 p.m. During the week, you can post your answers even after the market closes.

==>From Daily CNBC Bonus Bucks Trivia Answers<==

Daily Answers for
1/16/09:

Squawk Box question: What stock(s) did Fast Money trader Joe Terranova recommend Thursday to play a gasoline price bottom?

Answer: Valero

Squawk On The Street Question: In Cramer’s Dec. 22 “outrage” over ultra-short ETFs, where was UltraShort Financials ProShares?

Answer: up 1.4%

The Call Question: During Doug Hirschhorn's Jan. 15 CNBC interview, what "Breaking News" headline(s) appeared on-screen?

Answer: Dow Dips Below 8000

Power Lunch Question: According to the article "Is Microsoft's Songsmith Video Campy...", what hated TV show was the promo video compared to?

Power Lunch Answer: Cop Rock

Best CD Rate:

==> 4.50% at Pentagon Federal Credit Union <==

Street Signs Question: In Cliff Mason's blog post about legalizing narcotics, which economist does he refer to?

Street Signs Answer: Milton Friedman

Closing Bell Question: In the installment of "Pros Say" called "We Need More Bailouts, Bigger TARP", who praised Fed Chairman Ben Bernanke?

Closing Bell Answer : here

Must see video:

Was Barney Frank Responsible For Financial Collapse?

2009 Prediction of 50 Bank Closings

2009-01-01T10:38:00.000-08:00

New Year's Day is here and it's time for some 2009 predictions. The falling real estate prices are leading to increasing mortgage loan defaults and foreclosures. 2009 will continue that trend. The FDIC closed about two dozen banks in 2008. They probably would have closed more, but lacked the staff to handle them all. They were able to push off most of the closed banks onto healthier banks, but the FDIC got stuck managing the big one, IndyMac Bank. Up until New Year's Eve, they were still negotiating with Fannie Mae over some bad loans made by IndyMac in an effort to get the best possible sale price from Dune Capital Management and others.

The FDIC is increasing staff for 2009 and soon hopes to have the troubles of IndyMac Bank behind them. The increased staff will be able to handle more bank closings, so it is not difficult to predict that 2009 will see the closing of 50 banks or more. What is more difficult is to predict which banks are most likely to close.

Here's my list of the 50 banks most likely to close in 2009:

1 Magnet Bank, Salt Lake City, UT
2 Citizens Community Bank, Ridgewood, NJ
3 FirstBank Financial Services, McDonough, GA
4 Westsound Bank, Bremerton, WA
5 Suburban Federal Savings Bank, Crofton, MD
6 America West Bank, Layton, UT
7 The Community Bank, Loganville, GA
8 Silver Falls Bank, Silverton, OR
9 Ocala National Bank, Ocala, FL
10 Sun Security Bank, Ellington, MO
11 Eastern Savings Bank, FSB, Hunt Valley, MD
12 Alliance Bank, Culver City, CA
13 FirstCity Bank, Stockbridge, GA
14 Chestatee State Bank, Dawsonville, GA
15 First Security National Bank, Norcross, GA
16 Ocean Bank, Miami, FL
17 First Georgia Community Bank, Jackson, GA
18 Family Bank and Trust Co., Palos Hills, IL
19 Southern Community Bank, Fayetteville, GA
20 BankCherokee, Saint Paul, MN
21 First Tuskegee Bank, Tuskegee, AL
22 Federal Trust Bank, Sanford, FL
23 Pinnacle Bank, Beaverton, OR
24 Lake Country Community Bank, Morristown, MN
25 Mesa Bank, Mesa, AZ
26 Bank of Wyoming, Thermopolis, WY
27 1st American State Bank of Minnesota, Hancock, MN
28 First State Bank of Altus, Altus, OK
29 EvaBank, Eva, AL
30 Strategic Capital Bank, Champaign, IL
31 Ebank, Atlanta, GA
32 Polk County Bank, Johnston, IA
33 Parkway Bank, Rogers, AR
34 Security Bank of Gwinnett County, Suwanee, GA
35 State Bank of Park Rapids, Park Rapids, MN
36 Herrin Security Bank, Herrin, IL
37 Omni National Bank, Atlanta, GA
38 Northpointe Bank, Grand Rapids, MI
39 Towne Bank of Arizona, Mesa, AZ
40 Haven Trust Bank, Duluth, GA
41 Timberland Bank, El Dorado, AR
42 Blue Ridge Savings Bank, Inc., Asheville, NC
43 First Piedmont Bank, Winder, GA
44 Select Bank, Grand Rapids, MI
45 Oxford Bank, Oxford, MI
46 Security Bank of North Metro, Woodstock, GA
47 MetroPacific Bank, Irvine, CA
48 Earthstar Bank, Southampton, PA
49 Neighborhood Community Bank, Newnan, GA
50 The Home Savings and Loan Company, Youngstown, OH

Surprisingly, only two California banks make my list.

Florida Home Prices

2009-01-01T09:01:00.000-08:00

The Case-Shiller home price index for October came out this week and the results aren't pretty. Home prices took a dive in October across most of the nation as credit continued to tighten. Lenders continue to tighten standards for mortgage borrowers to the point that now half of all homeowners with mortgages couldn't qualify to refinance their current mortgage balance. For those that can, rates are at historic lows. This is a great time to refinance for those who qualify and are currently paying over 6.25%.

In Florida, home prices continue to fall. Historical data and my current forecast for prices into this summer are shown in the graph.

30-Year Fixed Conforming Mortgage Rates

2009-01-01T08:28:00.000-08:00

Countrywide has the lowest APR at 4.478% for a $300,000, 30-year loan with 1.0 points.

LFCU = Locheed Federal Credit Union

30-Year Fixed Rate Mortgage
Loan amounts up to $417,000.
Rates current as of 12/29/08*

	Rate	Points	APR	Loan Amount	Monthly P&I
LFCU	4.990%	1.000%	5.086%	$300,000	$1,609
Bank of America	4.625%	0.988%	4.715%	$300,000	$1,543
Countrywide	4.375%	1.125%	4.478%	$300,000	$1,498
WAMU	4.750%	1.125%	4.854%	$300,000	$1,565
Wells Fargo	4.750%	1.000%	4.846%	$300,000	$1,565
Ditech	6.375%	1.000%	6.480%	$300,000	$1,872

*APR = Annual Percentage Rate. APR assumes a loan-to-value ratio of 80%, 30-year conforming 1st Mortgage. Closing costs and other fees apply. Points and closing costs affect APR. Monthly payments are estimated. Lender rates are subject to change.

NOTE: These rates are for comparative purposes.

Median Price of US Single-family Homes Falls Parabolically

2008-12-24T09:01:00.000-08:00

This chart from "Chart-of-the-Day" shows the price of single family home prices grew at a parabolic rate on the way up and they are now falling at an even faster parabolic rate.

Chart of the Day says:

For some perspective into the all-important US real estate market, today's chart illustrates the US median price of a single-family home over the past 38 years. Thanks, in part, to low long-term interest rates, the trend from 1991 to 2005 was impressive. Not only did housing prices increase at a rapid rate, the rate at which housing prices increased – increased. That brings us to today's chart which illustrates how housing prices have dropped well below their accelerated upward trend and 29% from the 2005 peak. It is worth noting that housing prices are currently decreasing at a rapid rate. In fact, the rate at which housing prices have been decreasing has been increasing.