FORECLOSURE DEFENSE AND BANK FAILURES

Some interesting thoughts about the effect of bank failure.

  • If the bank was the “lender” on your mortgage (or Deed of Trust) and note, what happens to the mortgage and note? Mutual of Omaha here is taking over the deposits of these failed banks. See below.
  • Is FDIC going to foreclose on “non-performing” loans? If so, are they not in the even more difficult position of defending charges of predatory practices and improper transfers of negotiable instruments that were created by fraud and ultimately sold within a single transaction that required fraud and deception on both ends of the transaction?
  • With all the employees scattered to the four winds, how will anyone wishing to foreclose be able to come up with a single witness that has personal knowledge of the loan transaction or what happened during the securitization process?
  • And by the way, has it occurred to Lenders that their interests are actually more closely aligned with borrowers than with their counterparts upstream in the securitization process? Lenders could staunch the bleeding in a New York minute by simply rolling over on the people upstream who initiated this scheme. Buyback liability would be stopped and the bank would remain whole.
  • LAWYERS BEWARE: YOU ARE NOT GOING TO KNOW HOW TO PROPERLY ADVISE YOUR CLIENTS, DEFEND THEIR HOMES OR EVEN FILL OUT THEIR BANKRUPTCY SCHEDULES WITHOUT ATTENDING OUR EMERGENCY WORKSHOP IN SANTA MONICA. NOR WILL YOU FIND OUT HOW YOU CAN MAKE MORE MONEY IN YOUR PRACTICE THAN YOU EVEN DID BEFORE WITH SOME VERY HAPPY CLIENTS. ATTORNEY WORKSHOP SEPTEMBER 4 SANTA MONICA, CA

$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$

Two more banks fail; FDIC sells deposits

Mutual of Omaha Bank takes over accounts of California, Nevada lenders

By MarketWatch
Last update: 3:24 p.m. EDT July 26, 2008
SAN FRANCISCO (MarketWatch) — Two more banks were shut down by federal regulators late Friday, who sold the banks’ deposits to Mutual of Omaha Bank. It brings to seven the number of bank failures so far this year.
The Federal Deposit Insurance Corp. said it was appointed receiver of First National Bank of Nevada, based in Reno, Nev., and First Heritage Bank of Newport Beach, Calif. – both units of First National Bank Holding Co., of Scottsdale, Ariz.
Mutual of Omaha Bank’s acquisition of all deposits was the “least costly” resolution for the Deposit Insurance Fund compared to all alternatives because the expected losses to uninsured depositors were fully covered by the premium paid for the banks’ franchises, the FDIC said in a statement.
All depositors, including those with deposits in excess of the FDIC’s insurance limits, will automatically become depositors of Mutual of Omaha Bank for the full amount of their deposits, the FDIC said.
Over the weekend, customers of the banks can access their money by writing checks or using ATM or debit cards. Checks drawn on the banks will be processed normally. Loan customers should continue to make loan payments as usual.
As of June 30, 2008, First National of Nevada had total assets of $3.4 billion and total deposits of $3.0 billion. First Heritage Bank had total assets of $254 million and total deposits of $233 million, the FDIC said.
In addition to assuming all of the deposits of the banks, Mutual of Omaha Bank will purchase approximately $200 million of assets from the receiverships.
Mutual of Omaha Bank will pay the FDIC a premium of 4.41% to assume all the deposits. The FDIC will retain the remaining assets for later disposition, the FDIC said.
FDIC will retain most of First National’s loan portfolio, Mutual of Omaha Bank said in a statement on its Web site.
The FDIC said the failures would likely cost the FDIC’s deposit insurance fund roughly $862 million. The failed banks had combined assets of $3.6 billion, .03% of the $13.4 trillion in assets held by the 8,494 institutions insured by the FDIC.
Overwhelmed by problem loans
The Office of the Comptroller of the Currency, a division of the Treasury Department, said First National Bank of Nevada “was undercapitalized and had experienced substantial dissipation of assets and earnings due to unsafe and unsound practices,” according to a report in the online edition of The Wall Street Journal.
First National Bank of Nevada had 25 branches, 15 in Arizona and 10 in Nevada, some of which came from its June 30 merger with the First National Bank of Arizona.
The Journal also reported that according to regulatory filings, the Arizona-based bank that was folded into First National Bank of Nevada had a net loss of $131.3 million in the first quarter. The bank had $95.9 million in loan-loss provisions, a sign that it was being overwhelmed by problem loans, the Journal report noted. First National Bank of Nevada had a first-quarter net loss of $7.3 million, hurt by a loan-loss provision of $18 million.
First Heritage Bank, which specializes in commercial banking, operated three locations in the Los Angeles area. It had a first-quarter net loss of $1.9 million, according to a regulatory filing.
Mutual of Omaha Bank has more than $750 million in assets and operates 14 retail branches in Nebraska and Colorado with commercial lending offices in Dallas and Des Moines, Iowa. It is a subsidiary of insurance and financial services company Mutual of Omaha.
“We would first like to reassure all customers of First National Bank of Nevada and First Heritage Bank that all their deposits are safe and accessible,” Jeffrey R. Schmid, Mutual of Omaha Bank’s chairman and chief executive, said in a statement. “Their deposits will automatically transition to Mutual of Omaha Bank and we will be open for business on Monday morning.”
Earlier this month, IndyMac Bancorp Inc. became the biggest casualty of the subprime mortgage crisis over the weekend, as federal regulators shut down the troubled Pasadena, Calif.-based savings bank in one of the largest U.S. bank failures ever. See related story. End of Story

One Response

  1. Hi Mr Garfield
    I am a real estate investor in NH.I am being foreclosed on by Saxon Mortgage and The Bank Of NY.My auction was due to go on 9/1/08 but has been cancelled thanks to you,because I found your website and learned how to defend my position.I filed a petition to enjoin foreclosure last week that was scheduled for a hearing today.I also sent a leter of recission on the 17th of last month due to tila violations that I have found.They include no address on the right to cancel form,a understated APR and of coure no proof of origional note and mortgage.
    I recieved a call last night from an attorney from the foreclosure agency Harmon Law Offices and he agreed to volunteraly step the auction.We went to court today and informed the judge at the hearing.He had no clue of how Reg Z works and was trying to get me to agree to drop[ his office from the suit,which I will not do.
    Just now I got off the phone with another attorney that was just as stupid as the first one.all he was telling me was that I had to pay back the entire loan if I recinded and he kept laughing.I told him that was not true I was well aware of how the recsision process worked and it was not based upon my ability to repay anything and that he had until the 6th to refund my money and remove the lein.He stopped laughing after that.If you can recommend a good attorney out here in NH I would appreciate it,untill then Im confident that I can fight this and win.Thanks again for youre help,I couldnt Have done it without you.Also I would like to know if I could come to youre workshop even though I am not an attorney,I want to help not only myself but many others who are in the same position.
    STEVE BRUNELLE

Leave a Reply

%d bloggers like this: