Although signs of economic recovery have begun to take shape, don't expect the number of bank collapses to ease - that's the opinion of the federal agency that insures the nation's financial institutions. The FDIC is boosting its 2010 budget by a hefty 55 percent and adding staff in order to cope with another round of excessive bank failures next year. There have been 133 bank seizures so far this year, compared to 25 in 2008, only three in 2007, and none in 2006 and 2005. FDIC Chairman Sheila Bair says the cost of failures between 2009 and 2013 could top $100 billion.
There were 1.7 million REOs and homes facing imminent foreclosure that had not yet hit the market at the end of the third quarter, according to data released Thursday by First American CoreLogic. The company says that at the current sales pace, it would take 3.3 months to get rid of this looming "shadow inventory." Combined with the 3.8 million new and existing homes visibly on the market, it represents a backlog of 11.1 months.
Many forecasts for the housing sector paint a picture of continuing price declines, rising foreclosure numbers, and a looming 'shadow inventory' that could stop recovery dead in its tracks, but Radar Logic says predictions of a second doomsday collapse are "exaggerated." The company believes that low home prices and government incentives will keep housing demand strong well into next year. Regarding that ominous supply of distressed properties lurking in the shadows, Radar Logic says it will enter the market at a controlled rate that can be absorbed by existing demand without pummeling prices.
Bank of America's three-month long search for a new CEO has come to an end, and the chosen one is one of their own. The company announced late Wednesday that Brian T. Moynihan will replace Kenneth D. Lewis as chief executive and president, effective January 1. Moynihan has held senior leadership positions at Bank of America across virtually all business lines. He currently serves as president of the consumer and small business banking unit.
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