1,000 Banks to Fail In Next Two Years: Bank CEO

CNBC ^ | August 27, 2009 | Natalie Erlich

[RobinMasters]

The US banking system will lose some 1,000 institutions over the next two years, said John Kanas, whose private equity firm bought BankUnited of Florida in May.

“We’ve already lost 81 this year,” he told CNBC. “The numbers are climbing every day. Many of these institutions nobody’s ever heard of. They're smaller companies.”

Failed banks tend to be smaller and private, which exacerbates the problem for small business borrowers, said Kanas, who became CEO of BankUnited when his firm bought the bank and is the former chairman and CEO of North Fork bank.

“Government money has propped up the very large institutions as a result of the stimulus package,” he said. “There’s really very little lifeline available for the small institutions that are suffering.”

This comes at a time when the FDIC has established new rules on bank sales. Private equity, for instance, would have to hold double the capital of their competitors in order to buy such an institution, said Kanas.

[LomanBill]

Excellent and informative post. Thanks!

[BP2]

What most people don't know is that the chart (featured on Glenn Beck's show, CNBC, and other places) on Post 17 ABOVE was originally featured as this in 2007, nearly 18 months before things really unraveled in September 2008:

This is page 47 of a report by Credit Suisse published in March 2007. The FULL March 2007 report is parked here: "Mortgage Liquidity du Jour: Underestimated No More"

This chart has since been updated, as shown in Post #17, bumping the expected foreclosures -UP- on moderate risk loans. Many of those borrowers in those categories bought houses in the 2004-2006 period before underwriters started tightening the terms to lend to high (subprime) and moderate risk (Option ARMS and Alt-A) borrowers under Community Reinvestment Act provisions.

So when you hear people like Barney Frank saying they didn't know about the looming foreclosure crisis, and how & when it was going to hit, you can see they LIE through their teeth! They (both Democrats and Republicans) were too busy enjoying contributions and profiting themselves from the inside knowledge.

THEY KNEW and let it happen back in early 2007, coming to a head in September 2008, right before the election!!! It's sickening to think of the TRILLIONS of dollars of personal wealth for retirement, mostly from unsuspecting Baby Boomer with IRAs, that is GONE forever.

And at the risk of sounding like a broken record -- the WORST is still ahead!

The only bright spot might be that for those who are about to have their house foreclosed on, if they ask for the bank to "Produce the Note", they have a hard time doing so.

This is because banks sold, and re-sold and re-sold the mortgages leading up to the big bust in September 2008, and have those mortgages tied up in mortgage-backed securities to such a degree that it stalls the actual Statutory Foreclosure process SIGNIFICANTLY.

The homeowner then has more time to get another job or find some way to improve the situation. Also, in many states, paying just ONE month's mortgage, even though the owner is 90 days behind, restarts the entire foreclosure process.

Fight Foreclosure: Make ‘Em Produce The Note!

[LomanBill]

>>Because, ultimately, this will result in food
>>shortages, the best way to control people.

Kurtz: Are you an assassin?
Willard: I’m a soldier.
Kurtz: You are neither; You’re an errand boy, sent by grocery clerks to collect a bill.

"The Appetite of Tyranny is never far removed from the Tyranny of the Appetite."

The Horror...

[twigs]

Obama may be in over his head, but he’s got financial gurus behind him running this thing. Soros, for one; I’m sure there’s others. They’re planning to own assets now in other hands.

[Reagan80]

Yeah, I’ll elaborate.

Welfare cases get to live in formerly $1,000,000 + McMansions for free while I continue to have to pay for my monthly mortgage payment; while still paying federal taxes for the aquisition, refurbishing and upkeep of said McMansions...

...and how much longer am I going to continue to do so...?

[twigs]

You should look up Steve Cordasco on the internet. He’s got a financial show on local radio here in the Philadelphia region. I used to listen to him while driving to work early on Saturday mornings. He addresses a lot of the things you’re trying to remember and he doesn’t understand why financial reporters are not digging into this story. It’s huge. He also knows a lot about T. Geithner and how he fits into this story.

[twigs]

We tried to buy such a property for over a year last year. We think that the real estate agent was part of the problem. He wanted the property himself and made an offer to the owner while he sat on our offer; he was later arrested for theft, but is still an active agent. We think that he had some kind of arrangement with the bank holding the second mortgage. Then, about the time we found another house to buy, the house quietly sold for 80K less than we had in our offer still on the table. Someone had connections...

[RushIsMyTeddyBear]

[urtax$@work]

Have noticed several for sale signs in our neighborhood over the past 2 yrs. ,collecting the info-flyer i watch the asking price
drop several Ks’$ in 3mo increments... then some still don’t sell, But... the For Sale sign will just disappear and the
house just sits there. So is this the result you are talking about ?

[ExSoldier]

Add to this the report in the WSJ within the last two days that the FDIC is bankrupt as of August 19th this year. Our "safety net" is gone.

[socialismislost]

Obama has got financial criminals behind him. Soros is one of them. You are right, they are planning to own assets now in other’s hands

[wolfcreek]

Is it happening again? The destruction of rural banks?

http://www.modernhistoryproject.org/mhp/ArticleDisplay.php?Article=SecretsCh09#Rural

[Texas resident]

The question: Where is the oversight of banking system?

Chris Dodd: Senate banking committee
Barney Frank: House banking committee

Same two guys who started this financial forest fire to win an election. Problem is that the fire is out of control and they have no clue how to stop it.
Plus add in the huge amount of commercial real estate that is empty/abandoned. Those notes are typically longer term than residential but when that ballon pops, the banks are going to be left holding the bag. And since there is precedent for the ozero regime bailing them out, that will happen again. All done with our tax money.

[SunkenCiv]

[Jedidah]

I’m finding your posts both informative and very interesting.

So what would you recommend as defensive steps for those of us who are financially responsible with reasonable savings and liquidity? I’ll admit: I’m truly frightened in many ways right now and really don’t know how to best position our assets for the storm ahead.

[dalebert]

well people need to make noise about it....these rats think they are pulling the wool over stupid american eyes

[dalebert]

I cant figure it out. as i see it liquid assetts will be worthless soon.....and so will everything else....buy food and hide it i guess so we dont starve to death....

[lgjhn23]

“May the debts of a thousand bank failures nestle in Obama’s private parts...”

..and may a pox and curse fall upon him and his czars.....

[Aquamarine]

Uh oh, I don’t see any money on those trees.

[Ghost of Philip Marlowe]

Additionally, that chart does not include commercial real estate, a huge bubble that is already popping.

Pick a mall, any mall, and drive around it and see how many resale shops are vacant.

When that bubble pops, not only will it be enough to create a mini-recession even if the economy is fine, but it is going to add another spike to unemployment.