The government-backed mortgage financier Fannie Mae is tightening its lending standards. The GSE says it will require a credit score of at least 620 for all mortgage loans delivered in accordance with its Selling Guidelines, including loans guaranteed or insured by a federal government agency.
Atlanta's Georgian Bank, the state's fifth largest lender, was shut down by regulators Friday. It's the 95th FDIC-insured institution to go under so far this year, compared to 26 in all of 2008 and only three in 2007. As banks continue to struggle with both residential and commercial mortgage portfolios, the FDIC is preparing for even more institutional closures. The agency's board is scheduled to meet Tuesday to discuss how to replenish its fund, which has dwindled to a 17-year low.
The housing crash is about to come back with a vengeance, as 7 million new foreclosure properties are about to hit the market, analysts at Amherst Securities Group LP said this week - a huge shadow inventory that threatens to further destabilize a housing market that had shown signs of righting itself over the summer. Market observers say that loan modifications, legal wrangling, redefaults, and bank practices have delayed foreclosures, and that an undisclosed glut of homes is about to come to light.
One year after federal regulators launched their bold plan to rescue troubled financial markets, controversy continues to swirl around the Troubled Asset Relief Program and how it has used funds from its $700 billion coffer. TARP's birthday came as debate heats up on Capitol Hill, Wall Street, and Main Street over whether the program should be extended beyond its December 31 expiration date. One congressional watchdog panel says so far, the program hasn't resulted in sounder banks, fewer toxic assets, or looser credit to small businesses.
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