Well, it has been several days now since the two banks in Blue Ridge and Ellijay have failed. We have had a chance to catch our breaths and to know that the sky is not falling. Depositors are protected and business is going on as usual as always.
One hiccup in one of my closings though. It was a sale of a foreclosed property owned by Bank of Blue Ridge. Scheduled to close this Friday, one week after the FDIC take over, we were informed that the property was now owned by the FDIC and they would be contacting us about what procedures we would have to follow for this sale under the new circumstances.
The buyer had also arranged for financing through the Bank of Blue Ridge. Now, the bank is unable, under the new ownership, to offer the same terms on the loan. The buyer has to shop for new financing that had been previously in place.
Life goes on……….
Thursday, March 25, 2010
Saturday, March 20, 2010
Two north Georgia Banks acquired by FDIC
Appalachian Community Bank (also operating as Gilmer County Bank) and Bank of Hiawassee (also operating as Bank of Blue Ridge and Bank of Blairsville) were acquired by the FDIC, Friday, March 19, 2010.
(Please note that the Bank of Ellijay was NOT part of the financial institutions involved with this action.)
Appalachian Bancshares, Inc., Ellijay, GA wholly owns Appalachian Community Bank F.S.B., McCaysville, GA, which has branch offices located in Murphy, NC and Ducktown, TN. were not subject to this transaction and will continue to operate as usual.
All deposit accounts for Appalachian Community Bank and Gilmer County Bank have been transferred to Community & Southern Bank of Carrollton, GA. For more information on Community & Southern Bank, you can visit their web site at http://www.thecsbank.com/. They will open for business as usual Monday morning.
Bank of Hiawassee (Bank of Blue Ridge and Bank of Blairsville) was sold by the FDIC to Citizens South Bank of Gastonia NC. It too will open Monday morning under its new ownership. More information of Citizens South Bank can be found at www.citizenssouth.com
If you have questions about your deposits, you can call an FDIC representative at 1-800-508-8289. Lots more information about the consequences of a bank failure can be found at http://www.fdic.gov/bank/individual/failed/borrowers/index.html
(Please note that the Bank of Ellijay was NOT part of the financial institutions involved with this action.)
Appalachian Bancshares, Inc., Ellijay, GA wholly owns Appalachian Community Bank F.S.B., McCaysville, GA, which has branch offices located in Murphy, NC and Ducktown, TN. were not subject to this transaction and will continue to operate as usual.
All deposit accounts for Appalachian Community Bank and Gilmer County Bank have been transferred to Community & Southern Bank of Carrollton, GA. For more information on Community & Southern Bank, you can visit their web site at http://www.thecsbank.com/. They will open for business as usual Monday morning.
Bank of Hiawassee (Bank of Blue Ridge and Bank of Blairsville) was sold by the FDIC to Citizens South Bank of Gastonia NC. It too will open Monday morning under its new ownership. More information of Citizens South Bank can be found at www.citizenssouth.com
If you have questions about your deposits, you can call an FDIC representative at 1-800-508-8289. Lots more information about the consequences of a bank failure can be found at http://www.fdic.gov/bank/individual/failed/borrowers/index.html
Saturday, March 6, 2010
Ratajczak looks into the Future.....
I recently had the privilege to attend a seminar where economist Dr. Donald Ratajczak spoke on his insights into our economic future. Dr. Ratajczak is a noted economist, the former head of the Georgia State University economic forecasting center and a noted worldwide lecturer. His opinions are in demand by the media and he is often sought after by major television networks for his thoughts on the economy.
Below is a summary of what Dr. Ratajczak sees for our economy in the near future:
Banks are reeling from the bad loans that were made over the past few years. Many lenders are surprised to find out how bad their portfolios really are. The banks feel that federal regulators are looking over their shoulders. How do the banks keep the regulators at bay? How do they improve their loan portfolios? They need lend…to good qualified borrowers. Then the banks will have more good loans in their portfolios.
Are we in an economic recovery? Yes, but it is not the traditional recovery that is usually led by the housing sector. Housing, in this recession, is a laggard. We have a two to three year inventory of unoccupied residential houses. However, by 2013, the inventory should be back to “normal.”
The recovery is slow because the banks won’t lend. New loans are DOWN eight per cent (8%) from this time a year ago. However, deposits are UP eight per cent (8%) from last year. When lending is down and deposits are up, the banks have money. They have plenty of money to lend if they would do so.
The banks need to change their manner of lending in order to get better loans into their portfolios. With a required credit score of 700, only one-third of the population can qualify for a loan. If the criteria were lowered to 675, then forty-five per cent (45%) of the population could qualify for a loan.
The Jobs Report for February showed a loss of thirty thousand jobs. However, sixty-four thousand of those job losses were in construction and government. State governments are letting people go to save money; state governments are experiencing large deficits and the fastest and easiest way for government to save money is to cut jobs. If the construction industry and government jobs are removed from the report, we actually had an increase of thirty thousand jobs last month. This trend should continue into the future.
Temporary jobs have also been increasing for the last five months. This will lead to job growth as temps are hired and made permanent workers. We should see continued job growth in March, April, and May –JBW 3/5/10
Below is a summary of what Dr. Ratajczak sees for our economy in the near future:
Banks are reeling from the bad loans that were made over the past few years. Many lenders are surprised to find out how bad their portfolios really are. The banks feel that federal regulators are looking over their shoulders. How do the banks keep the regulators at bay? How do they improve their loan portfolios? They need lend…to good qualified borrowers. Then the banks will have more good loans in their portfolios.
Are we in an economic recovery? Yes, but it is not the traditional recovery that is usually led by the housing sector. Housing, in this recession, is a laggard. We have a two to three year inventory of unoccupied residential houses. However, by 2013, the inventory should be back to “normal.”
The recovery is slow because the banks won’t lend. New loans are DOWN eight per cent (8%) from this time a year ago. However, deposits are UP eight per cent (8%) from last year. When lending is down and deposits are up, the banks have money. They have plenty of money to lend if they would do so.
The banks need to change their manner of lending in order to get better loans into their portfolios. With a required credit score of 700, only one-third of the population can qualify for a loan. If the criteria were lowered to 675, then forty-five per cent (45%) of the population could qualify for a loan.
The Jobs Report for February showed a loss of thirty thousand jobs. However, sixty-four thousand of those job losses were in construction and government. State governments are letting people go to save money; state governments are experiencing large deficits and the fastest and easiest way for government to save money is to cut jobs. If the construction industry and government jobs are removed from the report, we actually had an increase of thirty thousand jobs last month. This trend should continue into the future.
Temporary jobs have also been increasing for the last five months. This will lead to job growth as temps are hired and made permanent workers. We should see continued job growth in March, April, and May –JBW 3/5/10
Wednesday, February 24, 2010
Sign of the Times
Factoid: (sign of the Times)
One measure of real estate activity is the Real Estate Book. This is a national franchised publication to advertise real estate for agents and other real estate professionals. Each book is tailored to local areas.
Here in the Mountains of north Georgia, the last four issues of the Real Estate Book, (issues 21 #10; 21 #11, 21 #12 and 22 #1) contained 48 pages of ads, 40 pages, 32 pages and finally 24 pages respectively. We are now, sadly, referring to it as the Real Estate Pamphlet. Times are still hard.
One measure of real estate activity is the Real Estate Book. This is a national franchised publication to advertise real estate for agents and other real estate professionals. Each book is tailored to local areas.
Here in the Mountains of north Georgia, the last four issues of the Real Estate Book, (issues 21 #10; 21 #11, 21 #12 and 22 #1) contained 48 pages of ads, 40 pages, 32 pages and finally 24 pages respectively. We are now, sadly, referring to it as the Real Estate Pamphlet. Times are still hard.
Tuesday, February 9, 2010
Short Sale Fraud
We have had a lot of questions about "short sales" recently. I came across this article about problems you might encounter in a short sale where there is a second mortgage holder who has to agree to the sale even though there is no money going to that lender. The article is a bit long but I think it is worth it-Byron
Big Banks Accused of Short Sale Fraud
By Diana Olick
CNBC Business Reporter
Just as regulators, lawmakers and all forms of financial oversight boards are talking about new regulations to guard against mortgage fraud and another mortgage meltdown, there appears to be yet a new mortgage fraud out there today, allegedly perpetuated by agents of, yes, the big banks.
I was first alerted to this by Jeremy Brandt, the CEO of several companies that bring short sale agents, investors and sellers together.
His companies include 1800CashOffer, HomeFlux.com and FastHomeOffer.com. Brandt has a huge network of short sale real estate agents, and over the past several months he's been receiving all kinds of questions and complaints about trouble with second lien holders.
As we all know, during the housing boom, millions of Americans pulled cash out of their homes in the form of home equity loans and lines of credit. They also used "piggy back" loans in order to get even lower interest rates on their primary mortgages. Now, many of the borrowers in trouble, and many who are so far underwater on their loans that they don't qualify for any refi or modification, are choosing short sales as a way out. (Short sales are when the lender allows the home to be sold for less than the value of the loan). About 12 percent of all home sales by the end of 2009 were short sales, according to the National Association of Realtors.
In order for a short sale with two loans to happen, the second lien holder has to drop the lien. If they don't, and there's no short sale, the home goes to foreclosure and the first lien holder gets the house because second liens are subordinated debt to the primary loan.
In short, the second lien holder gets nothing. In order to get the second lien holder to drop the lien, the first lien holder generally negotiates some partial payment to the second lien holder. The second lien holder doesn't have to agree, but more and more are doing so.
That's all legal.
But here's what's not legal and what's apparently happening quite often recently. Since many second lien holders are getting very little, they are now allegedly requesting money on the side from either real estate agents or the buyers in the short sale. When I say "on the side," I mean in cash, off the HUD settlement statements, so the first lien holder doesn't see it.
They are pretty clear and pretty upfront about the fact that if the first lender knows they are getting paid, the first lender will kill the short sale," says Brandt. "So these second lenders are asking for the payments off the closing documents, off the HUD statement, usually in a cashiers check prior to closing. Once they receive that payment, they will allow the short sale to go through, which according to RESPA laws and the lawyers that we have spoken to on the topic is not legal."
I told RESPA specialist Brian Sullivan over at HUD about all this and he replied, "That's a red flag!"
Clearly illegal.
Most agents wouldn't go on the record with me, for fear of retribution by the banks with whom they have to work every day. But one agent, Kayte Gentry, of Keller Williams Integrity First Realty, was brave enough to blow the whistle.
"I think it's wrong, and I think somebody needs to hold them accountable, and every time I lose a house in foreclosure because of this, it hurts my client," says Gentry matter-of-factly. "Aside from being illegal and a violation of RESPA, it's immoral and truly it's just sad for the client that it's hurting."
Gentry says she has had the requests made three times and claims she lost one sale because of it.
"The big banks that have recently made this request, specifically payments outside of the closing statement have been Citi Mortgage and JP Morgan Chase."
JP Morgan Chase simply answered, "No Comment," when I relayed the charge to their media representative.
When we confront the lenders and tell them that this request is illegal and a violation of RESPA, they tell us it's been cleared through legal and they don't care. Do it anyway," charges Gentry.
I contacted the Treasury Department, HUD, FINCEN (Financial Crimes Enforcement Network) and the Federal Trade Commission, and none of their representatives could tell me of any active investigation into this. The folks at HUD said they'd be very interested to see my story.
© 2010 CNBC, Inc. All Rights Reserved
Big Banks Accused of Short Sale Fraud
By Diana Olick
CNBC Business Reporter
Just as regulators, lawmakers and all forms of financial oversight boards are talking about new regulations to guard against mortgage fraud and another mortgage meltdown, there appears to be yet a new mortgage fraud out there today, allegedly perpetuated by agents of, yes, the big banks.
I was first alerted to this by Jeremy Brandt, the CEO of several companies that bring short sale agents, investors and sellers together.
His companies include 1800CashOffer, HomeFlux.com and FastHomeOffer.com. Brandt has a huge network of short sale real estate agents, and over the past several months he's been receiving all kinds of questions and complaints about trouble with second lien holders.
As we all know, during the housing boom, millions of Americans pulled cash out of their homes in the form of home equity loans and lines of credit. They also used "piggy back" loans in order to get even lower interest rates on their primary mortgages. Now, many of the borrowers in trouble, and many who are so far underwater on their loans that they don't qualify for any refi or modification, are choosing short sales as a way out. (Short sales are when the lender allows the home to be sold for less than the value of the loan). About 12 percent of all home sales by the end of 2009 were short sales, according to the National Association of Realtors.
In order for a short sale with two loans to happen, the second lien holder has to drop the lien. If they don't, and there's no short sale, the home goes to foreclosure and the first lien holder gets the house because second liens are subordinated debt to the primary loan.
In short, the second lien holder gets nothing. In order to get the second lien holder to drop the lien, the first lien holder generally negotiates some partial payment to the second lien holder. The second lien holder doesn't have to agree, but more and more are doing so.
That's all legal.
But here's what's not legal and what's apparently happening quite often recently. Since many second lien holders are getting very little, they are now allegedly requesting money on the side from either real estate agents or the buyers in the short sale. When I say "on the side," I mean in cash, off the HUD settlement statements, so the first lien holder doesn't see it.
They are pretty clear and pretty upfront about the fact that if the first lender knows they are getting paid, the first lender will kill the short sale," says Brandt. "So these second lenders are asking for the payments off the closing documents, off the HUD statement, usually in a cashiers check prior to closing. Once they receive that payment, they will allow the short sale to go through, which according to RESPA laws and the lawyers that we have spoken to on the topic is not legal."
I told RESPA specialist Brian Sullivan over at HUD about all this and he replied, "That's a red flag!"
Clearly illegal.
Most agents wouldn't go on the record with me, for fear of retribution by the banks with whom they have to work every day. But one agent, Kayte Gentry, of Keller Williams Integrity First Realty, was brave enough to blow the whistle.
"I think it's wrong, and I think somebody needs to hold them accountable, and every time I lose a house in foreclosure because of this, it hurts my client," says Gentry matter-of-factly. "Aside from being illegal and a violation of RESPA, it's immoral and truly it's just sad for the client that it's hurting."
Gentry says she has had the requests made three times and claims she lost one sale because of it.
"The big banks that have recently made this request, specifically payments outside of the closing statement have been Citi Mortgage and JP Morgan Chase."
JP Morgan Chase simply answered, "No Comment," when I relayed the charge to their media representative.
When we confront the lenders and tell them that this request is illegal and a violation of RESPA, they tell us it's been cleared through legal and they don't care. Do it anyway," charges Gentry.
I contacted the Treasury Department, HUD, FINCEN (Financial Crimes Enforcement Network) and the Federal Trade Commission, and none of their representatives could tell me of any active investigation into this. The folks at HUD said they'd be very interested to see my story.
© 2010 CNBC, Inc. All Rights Reserved
Tuesday, January 19, 2010
A Tradition Ends?
Is it Over?
For the last sixty years, on the birthday of American write Edgar Allen Poe, January 19, a mysterious stranger has always appeared during the night to leave three roses and a half-bottle of cognac on his grave. This year, 2010, the Associated Press is reporting that the mysterious stranger did not appear.
This event has become a “must see” for die-hard Poe fans. Many fans had travelled from all over the country to stand outside the cemetery to await the appearance of the mysterious stranger.
More than three dozen disappointed Poe fans huddled in the cold on the night of January 19th, when the stranger failed to appear. Last year marked the 200th anniversary of Poe’s birth, so many speculate that the stranger probably thought it was a good time to end the tradition.
“Edgar Allan Poe (January 19, 1809 – October 7, 1849) was an American writer, poet, editor and literary critic, considered part of the American Romantic Movement. Best known for his tales of mystery and the macabre, Poe was one of the earliest American practitioners of the short story and is considered the inventor of the detective-fiction genre. He is further credited with contributing to the emerging genre of science fiction.[1] He was the first well-known American writer to try to earn a living through writing alone, resulting in a financially difficult life and career.” -Wikipedia
For the last sixty years, on the birthday of American write Edgar Allen Poe, January 19, a mysterious stranger has always appeared during the night to leave three roses and a half-bottle of cognac on his grave. This year, 2010, the Associated Press is reporting that the mysterious stranger did not appear.
This event has become a “must see” for die-hard Poe fans. Many fans had travelled from all over the country to stand outside the cemetery to await the appearance of the mysterious stranger.
More than three dozen disappointed Poe fans huddled in the cold on the night of January 19th, when the stranger failed to appear. Last year marked the 200th anniversary of Poe’s birth, so many speculate that the stranger probably thought it was a good time to end the tradition.
“Edgar Allan Poe (January 19, 1809 – October 7, 1849) was an American writer, poet, editor and literary critic, considered part of the American Romantic Movement. Best known for his tales of mystery and the macabre, Poe was one of the earliest American practitioners of the short story and is considered the inventor of the detective-fiction genre. He is further credited with contributing to the emerging genre of science fiction.[1] He was the first well-known American writer to try to earn a living through writing alone, resulting in a financially difficult life and career.” -Wikipedia
Thursday, January 14, 2010
Let it snow! Let it snow! Let it snow!
Snow Snow Snow It snowed a little over one inch –that’s right 1.0 inch- last Thursday. We were stuck for days. Actually we were stuck until Monday. On Monday and Tuesday, I couldn’t get out of the driveway and my neighbor loaned me her car. Our drive is located on an “upslope” so once the snow froze, we couldn’t get up that hill. Finally, yesterday, Wednesday, we were able to get out on our own. It was a bit “dicey” and we had to be careful but we make it. Temperature is getting warmer each day.
One added bit on excitement in cabin fever living-Tuesday night we lost our water. We had nothing. So no shower Wednesday morning, among other, unnamed, inconveniences. We are on a shared well with 8 other houses. After an investigation and search, we discovered that one of the houses day the was, whose owners are only here on weekend, had a burst pipe, Their garage was flooded. All the water rushed from the pipe and effectively emptied our well. Once the water was cut off to that pipe, the water came back. I love living in the mountains!
One added bit on excitement in cabin fever living-Tuesday night we lost our water. We had nothing. So no shower Wednesday morning, among other, unnamed, inconveniences. We are on a shared well with 8 other houses. After an investigation and search, we discovered that one of the houses day the was, whose owners are only here on weekend, had a burst pipe, Their garage was flooded. All the water rushed from the pipe and effectively emptied our well. Once the water was cut off to that pipe, the water came back. I love living in the mountains!
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