Archive for January, 2010
Two years of agony have ended for Claire and Nick Zalepka. Bank of America Corp. has foreclosed on the house in Hatfield, Montgomery County, they bought for $350,000 in 2002, when Claire's former employer, a pharmaceutical company, relocated her from North Jersey. With their two children, the couple now live in a rental in Lansdale.
In today's market, their house was worth only $200,000, said Claire Zalepka, 48. She and Nick, 47, a cabinetmaker, owed $300,000 on it when they finally said, "Enough."
"We've spent every dime of our savings," said Claire Zalepka, who was making six figures when she lost her job in January 2008, after almost two decades with the firm.
After Hurricane Katrina, Bernadette Guidry accepted her mortgage company’s offer to delay monthly payments until repairs were made to her Houma home.
Her credit was good.
She’d never missed a mortgage payment.
Four years later, the brick ranch teeters on the brink of foreclosure, she has filed for personal bankruptcy and owes $188,000 on the house, $49,000 more than before.
Guidry is one of five locals who deferred post-hurricane mortgage payments, a decision that led to financial woes, red tape that some fear they’ll never unravel and nearly caused some to lose their homes.
A look at the stories across HousingWire’s desk during the weekend…with more coverage to come on bigger issues:
Weeks after Tishman Speyer Properties and BlackRock indicated they would miss a scheduled repayment to senior lenders on a bond issued to finance debt from the joint purchase of Manhattan’s Stuyvesant Town and Peter Cooper Village, the firms are reportedly negotiating a transfer of operations back to the lenders and avoid bankruptcy.
A spokesperson for the joint venture ownership of the Stuy Town/Peter Cooper properties told HousingWire over the weekend that the firms have for the last few weeks negotiated in good faith to restructure the debt and ownership.
"It was our hope in these discussions that our partnership would remain as part of the long-term ownership," the spokesperson said. “Over the last few days, however, it has become clear to us through this process that the only viable alternative to bankruptcy would be to transfer control and operation of the property, in an orderly manner, to the lenders and their representatives."
The spokesperson added the joint ownership does not intend to place Stuy Town/Peter Cooper into bankruptcy.
“We make this decision as we feel a battle over the property or a contested bankruptcy proceeding is not in the long-term interest of the property, its residents, our partnership or the City," the spokesperson said.
“Tishman Speyer would not consider a long-term management contract to continue operating the property that does not involve ownership. Without a restructuring that would keep our ownership group as part of the equity, we felt it best that the new owners install a new management team."
Regulators closed another five banks Friday, which are estimated to cost the Federal Deposit Insurance Corp.'s (FDIC) deposit insurance fund a combined $541.4m. It brings the total number of banks closed so far in 2010 to nine and the total since the beginning of 2009 to 149.
The Florida Office of Financial Regulation closed Premier American Bank, based in Miami, and the Office of the Comptroller of the Currency (OCC) granted preliminary approval to investors for a national bank charter to assume deposits and assets.
In October 2009, the OCC granted preliminary approval to Bond Street Bank to operate as a shelf charter. OCC now has granted approval for Bond Street Bank to establish Premier American Bank, National Association and acquire the closed bank by the same name. The new group acquired $326.3m in total deposits and agreed to purchase nearly all of the $350.9m in total assets. The FDIC estimates that the closing could cost the deposit insurance fund $85m.
The Office of Thrift Supervision (OTC) closed Charter Bank, based in Sante Fe, New Mexico, and named the FDIC as receiver. A newly acquired subsidiary of Beal Financial Corp., Charter Bank, in Albuquerque, New Mexico, will assume $851.5m in total deposits and agreed to purchase the $1.2bn in total assets. It is estimated that the closing will cost the FDIC's deposit insurance fund $201.9m.
The Missouri Division of Finance closed Bank of Leeton, naming the FDIC as receiver. Sunflower Bank will assume all $20.4m in total deposits. The FDIC will retain the $20.1 in total assets for later disposition. The closing is expected to cost the FDIC's deposit insurance fund $17.8m.
The Washington Department of Financial Institutions closed Evergreen Bank, based in Seattle, Wash., and named the FDIC as receiver. Umpqua Bank, in Roseburg, Oregon, will assume the $439.4m in deposits and agreed to purchase nearly all of the $488.5m in total assets. It's estimated that the closing would cost the FDIC's deposit insurance fund $64.2m.
Columbia River Bank, based in Dalles, Oregon, was closed by the Oregon Division of Finance and Corporate Securities. The FDIC was named receiver, and Columbia State Bank, in Tacoma, Washington, will assume the $1bn in deposits and agreed to purchase $1.1bn in total assets. The closing is estimated to cost the FDIC deposit insurance fund $172.5.
The list of servicers participating in the Home Affordable Modification Program (HAMP) grew to 110, according to the Troubled Asset Relief Program (TARP) transaction report.
Under HAMP, the US Treasury Department allocates capped incentives to servicers for the modification of loans on the verge of foreclosure. According to the lastest HAMP progress report, the servicers combined to provide 66,000 permanent modifications through December. The program provides $35.5bn in total potential capped incentives for the servicers, which only receive the funds for permanent modifications.
Specialized Loan Servicing, based in Highlands Ranch, Colorado earned the highest cap of $64.1m. Digital Federal Credit Union, in Marlborough, Mass. received the second highest of the newcomers with a $3m cap. The third highest of the new servicers was Greater Nevada Mortgage Services, of Carson City, Nev., with a $770,000 cap.
The Treasury provided a $260,000 cap to Fresno County Federal Credit Union, based in Fresno Calif. Roebling Bank of Roebling New Jersey, received a cap of $240,000, and First National Bank of Grant Park, of Grant Park, Ill., received a cap of $140,000.
The European Commission (EC) approved restructuring plans for Bradford & Bingley plc (B&B) - one of the largest banks in England that provide capital to landlords to purchase properties in the Buy-to-let market – and Dunfermline Building Society, according to a Monday statement from Her Majesty's (HM) Treasury.
The EC approved the government guarantee arrangements related to B&B that were previously announced in late September 2009 as part of the restructuring plan, which will remain in place until the wind-down of B&B.
In September 2008, B&B was taken into public ownership when the Financial Services Authority (FSA) determined the bank had breached its threshold conditions for operating as a depository institution. UK bank Abbey/Santander took over the retail deposit business following a competitive sale process.
Write to Jon Prior.
The Treasury Department is set to revamp its program aimed at helping struggling mortgage holders from falling into foreclosure and losing their homes.
The New York Times is reporting that the Obama administration will soon announce changes to the $75 billion Making Home Affordable program, such as reducing the paperwork necessary for borrowers seeking reduced mortgage payments.
Banking industry representatives who spoke anonymously to The Times said that Treasury would offer increased assistance to homeowners no longer able to make mortgage payments because their paychecks have shrunk.
U.S. investors overwhelmingly see President Barack Obama as anti-business and question his ability to manage a financial crisis, according to a Bloomberg survey.
The global quarterly poll of investors and analysts who are Bloomberg subscribers finds that 77 percent of U.S. respondents believe Obama is too anti-business and four-out-of-five are only somewhat confident or not confident of his ability to handle a financial emergency.
The poll also finds a decline in Obama’s overall favorability rating one year after taking office. He is viewed favorably by 27 percent of U.S. investors. In an October poll, 32 percent in the U.S. held a positive impression.
“Investors no longer feel they can trust their instincts to take risks,” said poll respondent David Young, a managing director for a broker dealer in New York.
President Barack Obama's demand Thursday that Congress clamp down on the size of banks and their investments got major blowback from New York City Mayor Michael Bloomberg, who said it could cause layoffs and hurt the city.
It's a clash between the president and the mayor. President Obama wants to whittle away at the size of the financial services industry.
"The American people will not be served by a financial system that comprises just a few massive firms," the president said.
But Mayor Bloomberg said the banks and Wall Street are part of the bedrock of the city's economy, and efforts to slash their business just means less tax revenue for the city, which brings up the dreaded "L" word.
The global banking industry was thrown into turmoil on Thursday after President Barack Obama , responding to public rage over the financial crisis, proposed the most far-reaching overhaul of Wall Street since the 1930s.
In reforms that could force the restructuring of some of the biggest names in US finance, including JPMorgan Chase and Goldman Sachs, Mr Obama promised that “never again will the American taxpayer be held hostage by a bank that is too big to fail”.
Flanked by Paul Volcker, the former Federal Reserve chairman, who has advocated the move for months, Mr Obama called for banks to be banned from running their own trading desks and “owning, investing in or sponsoring” hedge funds and private equity groups.
