WESTBURY, 28 DEC 2009 [Marissa Fajt for The American Banker] – In a story reprinted in Investment Banking Consultant, Marissa Fajt of The American Banker describes the innovative arrangement under which New York Community Bancorp purchased failing Amtrust Bank of Cleveland earlier this month.

With $12 billion in assets, Amtrust was one of the largest banks to fail this year and the FDIC was expecting its failure to cost its insurance fund about $2 billion.

After the FDIC took it into receivership, NY Community bought Amtrust for just over $23 million. While stipulating that it would take none of Amtrust’s problematic assets, the purchase brought Community assets of about $11 billion in cash, securities and performing loans as well as an equal amount of liabilities.

Part of the deal includes a non-traditional set of loss-sharing, or “true-up”, provisions that will limit NY Community’s potential loss from the acquisition. The provisions include the FDIC being ready to cover 80% of losses up to just over $900 million and 95% beyond that threshold.

Pushing the limits of deal-making even further was NY Community’s offering the FDIC some market action in its shares. In brief, Community issued to the FDIC 25 million equity participation units exercisable from December 9, 2009 through December 23, 2009.

Under the terms of the instrument, the FDIC has the opportunity to obtain either a cash payment or shares of its common stock – at the sole option of the Company – with a value equal to the results obtained by the product of the following two numbers: 

• the amount by which the volume weighted average price (VWAP) of its common stock over each of the two NYSE trading days immediately prior to the exercise of the equity appreciation instrument exceeds $12.33 (the closing price on Friday 4 December) 
• 25 million

In the weeks since the acquisition NY Community shares climbed steadily, closing at 14.57 on the 23^rd and the FDIC netted over $20 million in the deal.

It’s very likely that there will be future deals with similar structures and although we at Thinking Long are usually suspicious at financial “cleverness”, we whole-heartedly applaud the creative approach that was taken in this case and confess a bit of pride in knowing that it was a Long Island institution that brought this new tool to FDIC’s rescue kit.

2010 Is The Year of Terrorism, Economic Crash

(CFD.net.au – Contract for Difference, Share, Forex, ETFs, Commodities Traders) -

Oct. 28 (Bloomberg) — Banks, hedge funds and other financial firms that hold more than $10 billion in assets would pay to rescue companies whose collapse would shake the financial system under draft legislation crafted by a U.S. House panel.

The House Financial Services Committee measure lays out steps for dealing with the biggest institutions and gives the Federal Reserve power to shrink firms that pose a systemic risk. The

bill

, released yesterday, is a compromise worked out by the Treasury Department and Chairman

Barney Frank

, a Massachusetts Democrat.

The legislation “is a tough and sound response to too-big- to-fail,” said

Michael Barr

, an assistant Treasury secretary who has helped spearhead the Obama administration’s work to overhaul Wall Street rules. “It spells out the harsh consequences of Failure while preserving the government’s ability to prevent a financial meltdown.”

The plan would shift the costs to rescue and unwind firms away from Taxpayers who were forced to fund a $700 billion bailout last year after the near collapses of Bear Stearns Cos. and

American International Group Inc

. Treasury Secretary

Timothy Geithner

is scheduled to testify to the committee tomorrow and endorse the plan.

President

Barack Obama

in a letter to Frank congratulated the committee for progress made on a “strong package” of financial regulations and urged the lawmaker to press ahead.

“Taxpayers simply must not be put in the position of paying for losses incurred by private institutions,” Obama wrote yesterday. “When major financial firms Fail, government must have the ability to dissolve them in an orderly way, with losses absorbed by equity holders and creditors.”

FDIC, Federal Reserve

The measure differs in some ways from Treasury’s proposal issued in June. It gives the Federal Deposit Insurance Corp. more authority to resolve Failing firms and it further restricts some of the Fed’s emergency powers. The legislation doesn’t detail which firms would be identified as too-big-to-fail, A similar bill hasn’t been drafted in the Senate.

Frank said yesterday that the $10 billion threshold will exempt smaller

community Banks

that wouldn’t trigger systemic risk, while broadening the cost to an array of money management firms.

“The purpose is to go to other institutions as well because they would get the benefits,” Frank told reporters after a committee meeting in Washington.

While Banks and other companies were still digesting the legislation last night, the plan is likely to draw more support from the industry than other aspects of the Obama regulatory overhaul, such as the Consumer Financial Protection Agency approved Oct. 22 by the House committee.

‘Potential Failure’

“Potential failure is necessary to ensure truly fair and competitive markets,” said

Rob Nichols

, president of the Financial Services Forum, a Washington-based trade association of financial services company chief executives. “We need the legal authority and procedural protocol for winding down even the largest, most interconnected, and complex entities.”

Under the bill, the Fed would oversee the biggest financial companies, known as Tier 1, and would hold the most power on a new council of regulators, officials said. The measure gives each major market regulator such as the Fed, FDIC, other bank agencies, the Securities and Exchange Commission and

Federal Housing Finance Agency

a seat on the council and some authority for monitoring systemic risk.

The draft gives the council powers to impose “heightened prudential standards” on financial holding companies deemed a threat to market stability. That determination could be made on a broad range of criteria, including the degree of a company’s reliance on Short-term funding.

Shrink Firms

Once the decision to categorize a company this way is made, the Fed would have authority to impose leverage limits and dictate capital and liquidity requirements. The legislation would also give the Fed power to shrink firms, and “require the identified financial holding company to sell or otherwise transfer assets or off-balance sheet items to unaffiliated firms” or to terminate some activity after a notice and an opportunity for a hearing.

“This would be an unprecedented step — giving the Fed enormous power over the engines of capitalism in this country,” said

Joseph Engelhard

, senior vice president at Capital Alpha Partners in Washington and a former U.S. Treasury deputy assistant secretary. “The power to break-up financial conglomerates is extraordinarily broad authority.”

Federal Reserve Chairman

Ben S. Bernanke

said last week that he is Open to the debate on whether regulators should restrict the size and scope of the biggest institutions.

‘Economic Value’

“My own initial take on this is that we can address these issues in a way that doesn’t destroy the economic value of large, complex, multifunction firms,” Bernanke said at a Boston Fed conference.

The bill gives the FDIC the power to resolve financial holding companies. The agency would use a new line of credit from the Treasury so it could fund any takedowns. The money would then be paid back by an assessment on “any financial company” with at least $10 billion under management.

The legislation also limits the emergency powers the Fed used during the crisis to bail out AIG and finance $29 billion in troubled Bear Stearns assets to facilitate the broker’s merger with

JPMorgan Chase & Co.

The measure would require the Fed to get written approval from the Treasury secretary and restricts the use of such powers to “broadly available” credit facilities, while prohibiting loans to specific individuals or companies.

To contact the reporters on this story:

Robert Schmidt

in Washington at

rschmidt5@bloomberg.net

;

Rebecca Christie

in Washington at

rchristie4@bloomberg.net

Last Updated: October 28, 2009 00:01 EDT

Source: House Bill Taps Largest Firms to Pay for U.S. Financial Rescues

You don’t…..

It is very unfortunate that the US government is allowing banks to completely disregard general accounting rules and basically cook their books. It makes it very difficult to tell if your bank is next on the FDIC hatchet list. Even the professional investors can’t tell.

Here are the 3 lists I go by. I cross-reference these lists and make sure that only one (or none) of my bank accounts are on these lists. I make sure that all my bank accounts are covered by the FDIC. I make sure that all my personal and business money is in at least 3 different banks, so if one goes down, I have access to money to live or run a business. Three banks were closed, not bought on December 18, 2009. That means the depositors are waiting for a check from the FDIC for their money. I am sure that wait was short…for now.

Note: even though the big 5 banks that took bailout money are not on these lists does not make them safe. It is groovygirl’s opinion that one of the 5 will be set up as “the fall guy” in the next crisis and will be loaded with dud mortgages (commercial and residential) and imploded by the government. Right now, I would bet on Bank of America. Could be Citibank or Wells Fargo. It will not be JP Morgan or Goldman Sachs.

Bank list #1 from calculatedrisk. (I think the link is fixed, if not try the main website, click here.)

Bank list #2 from bankimplode-a-meter.

Bank list #3 from bankimplode-a-meter (by commercial real estate exposure only).

Banks loaded with commercial real estate will be very vulnerable in 2010.

FDIC failed bank list.

The FDIC has over 500 banks on their watch list currently, but they aren’t telling us who they are. You have to infer, which is what these lists are doing. It is highly likely that at some point in the next 4 years, these banks will close or be bought by another bank. The unofficial number of banks that should be on the list…..1000. The collapsing US banking system is a slow train wreck for the next 10 years. The only thing that the FDIC is doing is trying to control the implosion so as not to panic the public. At some point they will lose control of the situation.

The US banking system has completely changed (imploded) and no one made an announcement.

Click here for US block of China’s purchase of NV gold mining company.Very interesting. Apparently, China owning an American gold mining company is a security threat.

Click here for Jim Sinclair’s latest radio interview on gold and the dollar. Very good, listen twice or three times. All you need to know is in this interview.

Click here for Jim Rogers and Marc Faber thoughts on the coming crisis.

Click here for an interesting look back at the stock market in the last decade. It was the worst market for investors…..ever. We are in the winter cycle of the K-wave. Invest in assets that will keep their purchasing power in the next 10 years…..precious metals and commodities.

Click here….Project Mayhem on zerohedge (.) com talks about 2010, food, and gold.

Click here…..just a reminder of the reset of mortgages coming down the pipe. The real estate industry is not in recovery. I have created other posts dealing with this huge issue headed our way in more detail. In addition, there are 1.7 million homes sitting on banks’ balance sheets waiting for the foreclosure process.

Side musing: 7 banks took a dive last friday. The interesting thing is that 3 of those banks had no buyers. This will happen more. Make sure your savings in the bank is FDIC insured and that you have your savings in at least 2-3 banks. We are now reaching a point where banks do not want to buy other banks cheap. The FDIC will have to buy them. At this point, the FDIC will start to drop some serious money to protect depositors. The last step will be giving depositors US Treasuries for their money. This is a slow train wreck. The American banking system is collapsing, just like it did in 1930’s, just slower, and the media will not cover it. The result will be the same. Use this time to protect yourself, do not think that the banking system will recover. Click here for the “real” bailout plan from zerohedge (.) com

(without cost to the taxpayers)

On December 15, an FDIC press release revealed that the 2010 budget for the regulatory agency will nearly double, as the agency girds up for “an even larger number of bank failures” in 2010.  Over 500 institutions, mainly community based, are now on the troubled list.  The vast majority of these are likely to fail under the current regulatory regime.  These institutions are the ones that typically lend in the community but can no longer do so because of tumbling real estate values which have decimated their capital bases.  Communities, of course, need such institutions to support economic growth.

In ’08, the federal government, using the credit of the American taxpayer, raced to save the “Too Big To Fail” (TBTF) institutions who are now so arrogant as to pay themselves unconscionable bonuses.  At the same time, nary a finger has been lifted to help community institutions which did not take unsuitable risks and did not over lever their balance sheets.  Given that the community institutions are the major lenders to America’s small businesses, where most jobs are created, the following is an outline of a plan to save these institutions without the use of taxpayer dollars.

Today, any of the more than 500 institutions on the FDIC’s troubled bank list find it impossible to raise capital (unlike the behemoths whose future existence is guaranteed because they are TBTF).  Any institution or private sector entity with capital looking to deploy it in the community banking sector simply wait for the FDIC to act first, as the FDIC’s bank closure model discourages capital investment prior to such closure.  When the FDIC closes a bank, it invites private sector entities to “bid”.  It then sells the closed institution’s deposits and some select assets to the bid winner, usually at bargain prices and often with “loss sharing” agreements (for any future loan losses on the assets purchased).  So, why would a rational private sector entity put capital into a watch list institution before the FDIC closes it, as the deal is so much sweeter after closure?

So, here is the plan.  What if a community bank could “recapture” its loan losses from ’08, ’09 and possibly even through ’10 into a special category which will count as regulatory (not GAAP) capital.  This would basically restore small bank capital to 12/31/07 levels.  At the end of 2010, the banks would have to begin to amortize this special regulatory pot over a fairly long period, say 7 to 10 years.  This will allow banks that were healthy at the end of ’07 to survive and earn their way back to health.

There are many benefits to this solution:

• No taxpayer dollars – the FDIC, which collects premiums for its fund directly from the insured institutions, will have time to rebuild its fund rather than borrowing from American taxpayers as they will have to do in 2010;
• While their GAAP capital will still show undercapitalization, once survival is assured, the capital markets will open up, and many of these institutions will have the capability of raising private capital themselves.  After all, even Citigroup was able to raise capital the week of December 13^th because their future existence is assured (TBTF); 
• While a few of the small institutions on the FDIC’s watch list may deserve to fail, the vast majority do not.  These institutions are vital to many local economies.  We saved the TBTF institutions who were deserving of failure (their large risky bets); maybe we should help the more deserving by simply altering a regulatory capital regulation;
• It is widely acknowledged that one of the failures in Japan’s 20 year fight with deflation is their refusal to recognize the bad loans on the books of their financial institutions.  Because they won’t lose their regulatory capital under this plan, banks will more rapidly recognize their bad loans and purge them from their books.  They will have an incentive to do so before the “recapture” period ends on 12/31/10.  This will accelerate the healing process in their local economies and put them (both the bank and the local economy) back on the road to health.

Robert Barone, Ph.D.

December 20, 2010

As my father was in the Air Force we were stationed overseas, when I was a young lad. We spent 3 years in England. I have so many wonderful memories of my time there, and maybe it was because I was young, but what I remember most were various sayings, slang and colloquislisms.

One of my favorite sayings was “Good Riddance to Bad Rubbish”. Since I was there in the early sixties, you still heard things like “Chip Chip Cheerio” (a way to say goodbye in british slang) and all that sort of rot. So that is the genisis of the title.

Anyway that is a whole minute of drivel you will never get back… Sorry.

OK so it looks like I hate the last 10 years…. Hate is a harsh word, but I would say it has been a roller coaster for many. Do you realize the changes that have occured in the last decade? The digital age is flourishing and this is just the beginning. Twitter, Facebook, the iPhone, digital cameras to name a few.

September 11th, which was the catalyst for starting one of the longest periods of war we have ever had. The tech bubble, the real estate boom and now bust. Our first African American President.

There have been highs and lows and personally my life was pretty blessed. We are now coming into what I believe is a long recovery. This recovery will not be a straight line back, but more of a roller coaster at times.

So how about the next 10?

Do I welcome them or cringe as I think about the hardships and pain many will have to endure? To be honest, even though I have been writing about gloom and doom lately, I am very optimistic. We can not continue to do the things we have done in this industry over the next ten years and survive. We have to come up with new and better paradigms as these are new times. We have to embrace technology as it is not going away. Many I have talked to lately tell me that most of the people that count in this industry will not utilize social networking and technology tools. Let me tell you that as I have been in the technology field for over 30 years, on thing is absolute; change or die.

Remember the fax machine, the cell phone, the microwave, ATM cards, email? What do they have in common? They were all new technologies at one time that people avoided like the plague, until a tipping point occured when you either had to succomb to the inevitability that you had to change or be left dangling in the cold.

Don’t wait to learn how to use social media and the Internet for more that checking your spam ridden email accounts.

We have started the Commercial Real Estate Distressed Assets Association (CREDAA) and we know we will not cure the world of poverty and hunger or come up with a new cancer cure, but we will be working to educate and find solutions to our current commercial real estate dilemmas.

I look forward to working with industry professionals, bankers and investors to find the best solutions to end the madness that is our current situation. We at CREDAA really believe that the holding of assets by banks, the FDIC and other authorities, is a recipe for disaster and at least it will cause our recovery to last so much longer than need be.

We do not believe CREDAA will save the world, but we will be active at trying to help turn around a small portion of it. Margaret Mead wrote “Never doubt that a small group of thoughtful, commited citizens can change the world. Indeed it’s the only thing that ever has.”

We invite you to join us in our quest to go from Reactive Survival Mode to Educated Self Empowerment Mode which will lead us to the land of Sustained Abundance and Prosperity. www.CREDAA.com

Happy Holidays to you and yours

JW Najarian

CREPIG
CREDAA

The Federal Deposit Insurance Corp. reported that the number of multifamily loans 90 days for more past due has doubled since last year and hit 3.6% in the third quarter — the highest since 1993.

The multifamily sector is experiencing record vacancy rates due to high unemployment and low household formation, according to Freddie Mac.

Freddie Mac and Fannie Mae are major investors in multifamily loans, and could experience greater delinquencies if the situation persists.

High jobless rates among teenagers (27%) and 20-24-year olds is forcing many to postpone household formation or a move back with family and friends, according to Freddie Mac chief economist Frank Nothaft.

In addition, the vacancy rates have moved up as federal tax credits for first-time homebuyers have encouraged renters to become homeowners. A Census Bureau report shows the vacancy rate on buildings with ten or more apartments is 13.5% as of Sept. 30.

For apartments built since the start of 2000, the vacancy rate is 23.2%, “reflecting in part the slow rental rate of newly built dwellings,” Mr. Nothaft says in a paper on housing trends. “As a result of rising vacancies and lack of opportunity to increase rents, multifamily property values are falling and delinquency rates on multifamily mortgages are rising,” said Nothaft.

The Freddie economist points out that the National Council of Real Estate Fiduciaries has reported that multifamily property values have declined 29% from their mid-2008 peak.

_______________________

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Please take a moment to view our newest video “Where are the bank REOs?” by Miguel de Arcos

About a year ago I wrote about People’s First Community Bank in “Short Sale Denied – Despite Cancer Diagnosis”.  My seller’s husband had kidney cancer, and her financial situation had become tenuous.  She could no longer afford the payments on her lot near Destin Florida.

I worked to help her do a short sale to avoid foreclosure. When we sent in the contract, People’s First told me they “do NOT do short sales, period”.  I called them and reiterated the diagnosis of kidney cancer, wondering how this woman could keep up with her payments.  I also asked, “Why would your company not consider a short sale in this economy?” I was told they had “not given any subprime loans, they were well-capitalized, and when they lent money, they expected to get it paid back”.  I said, “So you’d rather foreclose?”  They said “Yes”. When I told them I would write about the story in my blog, they warned me not to.

Today it was announced that the federal Office of Thrift Supervision has closed People’s First.  A few weeks ago the bank was notified by OTS for Prompt Corrective Action because they were deemed “significantly undercapitalized”.   Basically, a bank’s capitalization rating has to do with its percentage of capital, like cash, as compared to its risk-based assets, such as mortgage loans. According to the FDIC: ”Well Capitalized” means a total risk-based capital equal to or greater than 10 percent, “Adequately Capitalized”  is a risk-based capitalo ratio equal to or greater than 8 percent.  People’s First capital ratio has been reported at 2.55.

My question is, could Peoples First’s policy of refusing any short sale been part of its downfall?  If the bank insisted on foreclosing and repossessing properties, wouldn’t that have added to its risk-based assets?  If they had allowed short sales, wouldn’t their percentage of risk-based assets have been decreased?
Finally, wouldn’t allowing short sales have helped them live up to their motto, “The Best Bank in the Neighborhood”?

It’s Wendy!

Wendy Rulnick, Broker, CRP, CRS, GRI, ABR     Rulnick Realty, Inc.

Destin FL Real Estate

Destin Short Sales & Pre Foreclosure Help.

Read Wendy’s Destin Real Estate Blog

www.ShortSaleSuperStars.com for Realtors

 Call toll-free 1-877-ITS-WNDY (1-877-487-9639) or local 850-650-7883 ext 204

Email Wendy: itswendy@rulnickrealty.com

Wendy is a short sale and pre-foreclosure specialist and has been featured in “Kiplinger Personal Finance Magazine” and “Florida Realtor Magazine”. She serves: Destin, Santa Rosa Beach, Fort Walton Beach, Niceville, Bluewater Bay, Navarre, Seagrove Beach, Watercolor, Sandestin, Seaside, Crestview, Rosemary Beach, Mary Esther, Shalimar, Eglin AFB, Hurlburt Field.

According to the Office of the Comptroller of the Currency and Office of Thrift Supervision the delinquency rate on prime loans has doubled over the past year.

The delinquency rate is up 20% from the second quarter to 3.6% in the third quarter.

The third quarter report also shows continued deterioration in the performance of payment-option adjustable rate mortgages. Only 67.7% of options ARMs are performing, 16% are seriously delinquent and 11.9% are in the process of foreclosure. In the second quarter, 15.2% were seriously delinquent and 10% were in the process of foreclosure.

The national bank and thrift servicers completed more than 130,000 loan modifications in the third quarter. In total, more than 680,000 home loan modifications and payment plans, including those done on a trial basis, were implemented during the period. Despite the growth of loan modifications, more than half of all modifications are 60-days or more past due after six months.

In cases where the monthly principal and interest payment is reduced by at least 20%, the re-default rate is only 26.7%. After 12 months, the re-default rate is 38.6%, compared to 66% where the modification leaves the borrower’s payment unchanged.

Overall, 87% of the loans in the servicing portfolios of large banks and thrifts are performing and 6.2% are 60-days or more past due, according to the OCC/OTS quarterly Mortgage Metrics Report.

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Richard Cordray, Ohio Attorney General, has filed a lawsuit that alleges unfair loan modification agreements and faulty customer service against Barclays Capital Real Estate dba HomEq Servicing.

Filed in Montgomery County Common Pleas Court, the lawsuit alleges that at-risk homeowners “were forced to enter into one-sided agreements,” that released HomEq of all liabilities requiring borrowers to waive their defense rights and pay additional fees.

“In Ohio we have zero tolerance for any more excuses,” Mr. Cordray said, while stating that “many servicers” are aggravating the crisis through noncompliance and excuses.

The attorney general has so far filed at least two similar lawsuits against other companies.

A HomEq spokesperson told reporters the lawsuit is “a meritless complaint” and that HomEq will vigorously defend itself against it. “HomEq is committed to quality customer service and to working with financially distressed borrowers to help them remain in their homes,” he said.

_______________________

Mortgage Loan Compliance® | A Certified Forensic Audit Company

Get The Facts on Your Loan and Protect Your Rights! | $59 Rapid Report Forensic Audits and $295 Certified Forensic Compliance Audits

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Failed U.S Banks (2009)
by Marcella Nelson
BedfordResearch – Bringing Your Data to Life!    

Seven more banks go belly-up as the tally moves to 140 
Seven U.S. banks were closed by regulators on Friday, December 18th bringing the total number of failed banks this year to 140 (only 26 were closed in 2008.) 

First Federal Bank of California (Santa Monica, CA), Imperial Capital Bank (La Jolla, CA), Independent Bankers’ Bank (Springfield, IL), New South Federal Savings Bank (Irondale, AL), Citizens State Bank (New Baltimore MI), Peoples First Community Bank (Panama City FL), and RockBridge Commercial Bank (Atlanta GA) cost the Federal Deposit Insurance Corporation (FDIC) a total of $1.8 billion. 

(click on image to enlarge)

 What’s particularly disturbing this time is that the FDIC was unable to find another institution to take over the Atlanta-based RockBridge Commercial Bank so checks will be mailed on Monday to insured depositors. This brings the total bank failures in Atlanta to 25 which is the highest state thus far in 2009. 

Two banks in California failed on Friday bringing the state’s  number of failed institutions this year to 17.  California is ranked the third highest among all states and Illinois is the second highest state with 21 bank failures. 

The image above shows the big picture.  Click on the image to enlarge or download the dashboard PDF at this link: Failed Banks 2009 – Dec 18 2009  

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About the FDIC
Congress created the Federal Deposit Insurance Corporation in 1933 to restore public confidence in the nation’s banking system. The FDIC insures deposits at the  nation’s 8,195 banks and savings associations and it promotes the safety and soundness of these institutions by identifying, monitoring and addressing risks to which they are exposed. The FDIC receives no federal tax dollars – insured financial institutions fund its operations.      

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The GOP’s 2010 narrative, courtesy of non-GOP Eli at Firedoglake: “Look, we were the ones who voted against giving Wall Street hundreds of billions of dollars, who voted against that tool at the Fed who doesn’t care about your job, who voted against forcing you to spend your hard-earned money on junk insurance you can’t afford to use.  Obama and the Democrats are screwing you over to funnel money to corporate fatcats, and we’re trying to stop them.” I bet it works, too.

Global-warming conspiracy theorists … at the Pentagon.

The health of the commercial banking industry, as summarized by Peterr: If you’re the FDIC putting your budget together for 2010, “you don’t double your receivership budget if you think bank failures are slowing down.” Fun fact: The figure being doubled was itself almost doubled in mid-year 2009 from what it was set at at the beginning of the year, because of the growth in bank failures.

Glenn Beck, cracked: When I was a kid, Cracked was the less nuanced competitor to Mad magazine. But in the Internet age, Cracked has found its footing. Consider this unpacking of the Glenn Beck phenomenon, which includes this gem: “The difference between a Glenn Beck conspiracy and the coronation scene in Carrie is Carrie didn’t overreact as hysterically.”

Different standards: Can you imagine the media hissy fit if Democrats were to try to filibuster an Iraq-Afghanistan spending bill just to delay some other legislation that was part of the GOP agenda? But when Republicans do it to try to delay health-care legislation, it’s perfectly OK, or at least unremarkable.

Blech: I started off my Christmas break with sinuses stuffy AND running AND hurting, and a lot of chest congestion. I’ve hit the Neilmed bottle twice, and it has helped a little but not as much as I had hoped.  Rather than playing in the snow with Hooper and Victoria, which is what I wanted to do, I’ve spent most of the day in bed. On the bright side, the streets appear navigable, so I should be able to run to the store tomorrow for the appropriate junk food to consume during Panthers/Vikings.

Speaking of which, I am probably deriving far more amusement than I should from the thought that the teams will be playing tomorrow night on the frozen tundra of Bank of America Stadium because the Vikes are now an indoor team. But I’m not under any illusions about who’s going to win, just as I hope John Fox is not under any illusions that Jerry Richardson is going to keep him on.

Former Bank Executives Want to Buy Failed Banks

According to this Reuters article, Some ex-bank execs want into FDIC auctions, former bank executives are raising investment funds to acquire failed financial banks. While the FDIC has not been willing to approve many such private equity deals thus far (almost all of the failed banks/financial institutions have been taken over by other banks/financial institutions), the article quotes Paul Miller, FBR Capital Markets analyst at Reuters Global Finance Summit, as saying the FDIC will likely become more receptive to private equity acquisitions of failed banks/financial institutions since “There’s just not enough good banks to take over all the bad banks. We’re going to see more of these groups bid right alongside other banks.” I agree. There are definitely not enough “good banks.” That is one of our problems. I just hope that the banks/financial institutions or private equity groups that take over the failed banks/financial institutions are sensible and willing to work with homeowners who want to short sell their homes.

If you are a Middle TN homeowner, property owner, condo owner, real estate investor, home builder or real estate developer who cannot pay your mortgage payments (due to losing your job, having your income reduced, illness, health problems, adverse business conditions, slow sales, loss of investment property tenants, vacancy issues, lack of funds to complete the project, feuding business partners, etc.), know that you will not be able to pay your mortgage, have defaulted on your mortgage, are already in foreclosure, or owe more than your home is worth, please contact me to discuss your options including a loan modification and a short sale (a real estate short sale occurs when the sale proceeds are not sufficient to pay off all the mortgages and liens on the property/home). I am a Middle Tennessee distressed real estate, short sale, pre-foreclosure (preforeclosure) and foreclosure REALTOR and Expert. I primarily help sellers (homeowners, property owners, condo owners, owners of high end homes and properties (estate homes, luxury homes and executive homes), real estate investors, home builders and real estate developers) of distressed real estate, short sales, pre-foreclosures, foreclosures, investment properties, failed new construction projects and struggling commercial real estate developments located in Middle Tennessee (Rutherford County TN, Williamson County TN, Davidson County TN, Robertson County TN, Maury County TN, Murfreesboro TN, Smyrna TN, La Vergne TN, Eagleville TN, Lascassas TN, Rockvale TN, Christiana TN, Brentwood TN, Franklin TN, Nashville TN, Belle Meade TN, Nolensville TN, Spring Hill TN, Gallatin TN, Springfield TN and Mt. Juliet TN). If you do need to short sell your home or property, or you need a quick sale due to being in foreclosure, you can request short sale and foreclosure help and assistance on my website at Get Short Sale and Foreclosure Help and Assistance from a Middle Tennessee Short Sale and Foreclosure REALTOR and Real Estate Expert.

Central Pacific Bank, Honolulu, will close its four California commercial real estate loan offices and wind down its West Coast operations by 2012. The offices are in Newport Beach, Pasadena, Rossville and San Diego.

In the third quarter, its parent company Central Pacific Financial Corp. lost nearly $72 million.

“We have not made a loan in California in more than 18 months and have been diligent in reducing our loan portfolio there,” said Ronald K. Migita, chairman, president and chief executive.

“By the end of the third quarter, we’ve reduced our total loans and leases by $622.6 million, or 15.3% from a year ago, many of which were in California. Our mainland team continues to reduce our exposure in California as we shift gears to fully concentrate on the Hawaii market”, Migita added.

Central Pacific has accelerated its efforts to reduce credit risk by pursuing loan sales, including potential bulk sales, in addition to loan restructuring and pay downs. As of the end of September 2009, the bank’s mainland construction and commercial real estate loans totaled $865.8 million.

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 Editor’s Note: Nobody wants to hear it. The housing market is dragging the government and the economic future of this country down the drain. For decades the FDIC has followed a model of dismantling failed banks by letting healthy banks take over the assets. Despite the calls from Sheila Bair at FDIC, we are clearly avoiding the model that works. We have 7,000 banks and credit unions that could easily absorb the accounts of the banks that have failed but are “too big to fail.” We have at least 50 million recorded documents that are defective in the chain of title of American homes. By all normal indicators, housing prices may still have another 20% drop.

The profits and bonuses announced by Wall Street confirm my prediction over a year ago that the losses were fictional and that the real profits were stashed off shore and in other esoteric vehicles waiting to be released in continual bursts of apparent “recovery.” You might as well allow a bank robber open a new bank next door with the money stolen from the first bank. Now we have the nose-dive of the main mortgage backers who insured mortgages and who insured each other and who let the investment banks play in the insurance playground.

The truth is that all the players in the securitization chain made a lot of money that was unreported, untaxed and illegal. It amounts to many trillions of dollars representing all the alleged financial problems of the American government and the U.S. Economy. The money still exists (insofar as money ever exists).

The truth is that like any balance sheet you can boil it down to a single collective entry: debit American homeowners $13 trillion, credit Wall Street investment banks with $13 trillion. Change the accounting rules and allow the so-called “off balance sheet” trades and positions and poof! You have $13 trillion in “losses” on the books while the profits are still happy and healthy off-shore. Where does the $13 trillion come from? The U.S. Taxpayer. Who benefits? The Wall Street investment banks who get to keep the profits, go after the property, and keep most of the government assistance that was too complicated to report, but which amounts to far more than the TARP money.

Who lost? Virtually every American homeowner and every taxpayer. How does it get corrected? Simple: return all “assets” to their real value and disregard the distortion caused by Wall Street. They are calling that principal reduction. It isn’t. It is merely a return to normalcy. Give the homeowners back their equity, their stake in the American dream and the economy will recover, albeit slowly (we do have other problems).

Avoid that remedy and we will have decades of misery, social chaos, and even governmental changes. Without taking ruthless inventory of the truth and returning wealth from whence it was stolen, the government is without value, except to the perpetrators who continue to scare the regulators and buy the legislators with their myths of why they are more important than the millions of homeowners who are losing their homes, their lives, and their futures to the greed of a few lucky people who have the ear of government.

4 Big Mortgage Backers Swim in Ocean of Debt

Banks to Spend 2010 Coping with Commercial Mortgage Maturities

National Real Estate Investor
Dec 16, 2009 12:54 PM, By Sibley Fleming

As billions of dollars in commercial debt comes due over the next two years, with many loans originated from 2005 to 2008 underwater, the need for capital will skyrocket. Of the $3.5 trillion in commercial mortgage debt outstanding, more than $1.1 trillion is needed to service that debt. That’s according to a new 2010 forecast from New York-based financial analyst Keefe, Bruyette & Woods (KBW).

The scarcity of cash will be most acutely felt in the banking sector, which holds some 80% of the approximately $500 billion in commercial debt that will mature through 2011.

Regional banks are particularly weighed down with commercial mortgages and will have a tough row to hoe in 2010. According to the KBW Quantitative Research Group, 300 banks had more than 25% of their loan portfolios in commercial mortgages at the end of the third quarter.

Read More…..

This is why CREDAA exists. I read that the market is up and new home sales are up and they will probably be up till the middle of the year when incentives are due to end. I am sure they will create new incentives, but the story is the same.

Without the grass roots efforts of the commercial financial industry coming together to find solutions and staying on top of current situations and trends, it is my belief that a recovery will take an enormous amount of time.

CREDAA is working to build alliances with industry leaders with the experience to figure it all out and we will be announcing programs we have found that have great solutions in the months ahead.

RIISnet is one of the platforms we feel the industry needs to move forward with realtime valuation and quick asset turnaround. If you have not been on a Tuesday evening call; you are missing an amazing opportunity.

If everyone keeps doing the same old thing and expecting a different outcome then…… You get the picture.

Come to CREDAA and participate. We have an amazing plethora, cocophany and cornucopia of information and services we will be delivering soon.

FYI – CREDAA is already amazing and if you are not using it daily you are missing out.

Here are the features we already provide:

• My Page – Area where members can store data about themselves including headshots, profile, general info, pictures and other pertinent data to introduce themselves to other members. Member’s profile is also totally configurable to choose colors graphics and what messages they do and do not receive.
• Private email service – Send and receive emails from other members and with free site email address.
• Discussion Forum – This allows members the ability to discuss anything pertinent to the distressed market with other members. Forum also allows uploading pictures and attachments and can take html formatted text.
• Chat Forum – Real-time forum for open discussion on news and issues in the industry
• Blog – A member can read or write blogs on various topics associated with the distressed markets. The blog also allows uploading pictures and can take html formatted text.
• Groups – A member can join an existing group or create their own group based on membership needs. Within groups there is the ability to have discussions pertaining to your group.
• Events – Members can find industry and CREDAA events as well as post their own events
• Pictures – Members can search for particular pictures or post pictures for other members to see.
• Videos – Members can search or post industry videos for other members to see.
• News – Current 24/7 Industry news from across the web including blog posts from other industry services.
• CREDAA TV – Allows members the ability to view current and automatically updated distributed videos from major broadcasters like NBC, FOX, Bloomberg and others on FDIC, TARP FNMA, distressed, toxic, unstable and troubled notes and asset news.
• RSS – All features including personal have RSS capability
• Graphs and Analytics – CREDAA has standard and proprietary data, graphs and analytics for the distressed, unstable, toxic, troubled assets and notes industry.
• Member Search – CREDAA has a low level search to find members fast and a premium search ability to find resources and providers in the industry based on multiple criteria.
• Alliances – CREDAA has and will continue to create and foster alliances with industry leaders that we believe have workable solutions to the many issues faced by banks, brokers, lenders, property owners and investors in the commercial real estate industry.

The news service alone is increadible. We search out the WHOLE Internet for all blog stories and news items that deal with distressed, troubled, unstable, toxic assets and notes and serve them up to you in one easy to read place.

CREDAA TV is not just some kidstuff You Tube fun package. Again CREDAA uses a service to automatically serve you the latest troubled assets videos from video news feeds like NBC, FOX, Bloomberg and many more so you don’t have to search the world for the most up to date news, views and information

If we are missing something. Come and discuss it on the Forum or Blog it to the world.

JW Najarian

CREPIG
CREDAA

The U.S. Attorney for Eastern District of Pennsylvania has indicted five people for a $14.6 million mortgage fraud scheme that resulted in at least 35 fraudulent loans.

According to the indictment, the defendants targeted financially distressed homeowners facing foreclosure, falsely promised them help in saving their homes, engaged in real estate transactions with straw purchasers, and obtained dozens of fraudulent mortgages. The defendants allegedly took whatever equity the homeowner had left, funneled it through various shell corporations they controlled, used some of it to pay the new mortgages, and put the rest of the equity into their own bank accounts.

Named in the 15-count indictment are Edward McCusker and John Alford Bariana, owners of Axxium Mortgage Inc.; McCusker’s wife, Jacqueline; and Jeffrey Bennett and Stephen Doherty, owners of the Doylestown law firm Bennett & Doherty, P.C. They are charged with conspiracy to commit mail fraud, wire fraud, and money laundering. Mr. Doherty is also charged with bankruptcy fraud.

Edward McCusker and Bariana, along with Jacqueline McCusker allegedly obtained the mortgages by submitting false documents to lenders and making false claims about the straw purchasers’ finances, the indictment said.

Doherty allegedly used fraudulent bankruptcy filings for some borrowers to delay foreclosure until McCusker had obtained an investor and a mortgage.

Bennett allegedly handled the closings for the real estate transfers.

Edward and Jacqueline McCusker, Jeffrey Bennett, and John Bariana face maximum sentences of 240 years imprisonment, $3.25 million in fines, three years supervised release, and a $1,200 special assessment. Stephen Doherty faces 385 years imprisonment, $4 million in fines, three years supervised release, and a $1,500 special assessment.

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Get The Facts on Your Loan and Protect Your Rights! | $59 Rapid Report Forensic Audits and $295 Certified Forensic Compliance Audits

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