State and federal regulators stepped in to shut the doors on seven more banks Friday. There were two closures in California, and one each in Illinois, Alabama, Michigan, Georgia, and Florida. The nation's economic crisis has certainly left its mark on the banking sector this year. These latest seizures push the failed bank tally for 2009 to 140 - an exorbitant increase compared to 25 in 2008, only three in 2007, and none in 2006 and 2005.
The GSEs' regulator, the Federal Housing Finance Agency (FHFA), is asking the U.S. Treasury to increase its financial lifeline for the nation's two largest mortgage financiers. Fannie Mae and Freddie Mac still have plenty of capital cushion - of the $400 billion allotted to them, they've only drawn about $112 billion. But administration officials only have until the end of the year to increase the GSEs' money pool without congressional approval. FHFA is currently in talks with the Treasury to raise the ceiling on its financial support to $600 billion, $300 billion for each firm.
In an effort to help families facing a foreclosure in the midst of the holiday season, both Freddie Mac and Fannie Mae made announcements Friday and suspended foreclosure evictions from December 19, 2009 through January 3, 2010. "If the property is occupied, our attorneys will halt the eviction during this holiday moratorium," said Ed Haldeman, Freddie Mac CEO. "In these extraordinary times, we want to provide a greater measure of certainty to these families during the holidays."
Citigroup is suspending foreclosure actions for about 4,000 borrowers scheduled to lose their home during the holiday season. The New York-based bank announced that its CitiMortgage and CitiFinancial business units will halt all foreclosure sales on Citi-owned first mortgage accounts nationwide and cease evictions on REO properties already seized for the next 30 days.
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