Friday, January 18, 2013

This Week in Bank Failures

Banks are reporting earnings for the latest quarter, and the results are mixed. It is clear that bank earnings are still complicated as a result of banks’ involvement in mortgages and derivatives. However much the banks gloat or groan, it is hard to tell how well they are really doing.

A new banking rule will affect flippers, investors who buy houses in order to sell them again almost immediately. If the sale is to a purchaser who is getting a mortgage loan for the purchase, the seller may have to have to obtain a new professional appraisal of the house. New appraisal rules also apply whenever mortgages are at unusually high interest rates.

A small bank in Minnesota failed tonight. State banking regulators closed 1st Regents Bank, in Andover, Minnesota. The failed bank had $50 million in deposits. Its successor is First Minnesota Bank.