- change ups
Bank failures down nationwide
Fewer banks failed in the first quarter of this year than did last year.
According to MortgageDaily.com, which follows real estate finance nationally, the Federal Deposit Insurance Corp. reported that 26 banks failed during the first three months of 2011. By the end of the first quarter last year, 41 had failed.
Of the 26 bank failures in first quarter 2011, 23 occurred in January and February. The FDIC only closed three in March.
Also, five mortgage-related firms or departments either failed or were shut down by management in the first quarter, and six credit unions also were closed during that timeframe. One year ago, seven mortgage firms and five credit unions ceased operations in the first quarter.
“One sector that saw the exit of high-profile players was reverse-mortgage lending,” said Sam Garcia, founder and publisher of Mortgage Daily.
“During the first quarter, Bank of America Home Loans disclosed plans to abandon reverse-mortgage lending. Financial Freedom’s parent, One West Bank Group LLC, said it decided to pull the plug on reverse lending, and Wells Fargo Home Mortgage announced it would eliminate its wholesale reverse-mortgage channel,” he added.
The Federal Housing Administration endorsed fewer reverse mortgages last year — 96,971 — compared to the 162,619 it sanctioned in 2009.
Garcia also said that NetMore America Inc. substantially reduced its operations.