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Big Banks

Wells Fargo Facilitates Credit to National Payday Lender

Adam Rust's picture

Posted January 3, 2012

Dollar Financial reports that it has secured a renewal on its current line of credit. In an announcement dated December 30th, Dollar (ticker: DLLR) said that the new line will afford it more flexibility and on favorable terms.

The $200 million line is offered by a syndicate and facilitated by Wells Fargo. The line can be used

Some Banks Rely on FHA, Others, Not So Much

Adam Rust's picture

Posted February 22, 2011

While a lot has been said about how banks are moving risk off their balance sheets and on to the Federal Housing Adminisitration, those critiques are really too broad. Yes, banks are relying on the FHA loan program, but others are not.

The FHA charges an upfront premium to borrowers when it makes a loan. The fee is currently 1 percent. There are 

The Big Banks Are Optimistic

Adam Rust's picture

Posted February 7, 2011

To paraphrase a famous (or infamous) critic of capitalism, "there is a specter haunting" our banks. It is the specter of unrealized losses from properties that our banks have yet to put into foreclosure. For anyone operating without insider knowledge, it is a best guess-scenario to estimate just how many writedowns are yet to come.

The Wall Street Journal says that a 2009 change to accounting rules softened rules on writedowns for bad assets. The

The Big Banks Move to FHA

Adam Rust's picture

Posted November 15, 2010

The Big Banks have suddenly decided to move traditionally underserved borrowers into loans guaranteed by the Federal Housing Adminsitration (FHA).

For years, FHA lending made up only a small fraction of mortgage loans. One source quotes a Wells Fargo representative who says that FHA lending made up only three percent just a few years ago.

The main difference between FHA loans and conventional products is that there is a lower down payment requirement. FHA asks for a downpayment of at least 3.5 percent. Conventional loan terms fluctuate, but in the past year most borrowers have had to put up at least 20 percent in order to buy a home. For investors the number has been much higher.

A Review of VA Lending

Adam Rust's picture

Posted November 11, 2010

In honor of Veteran's Day, Bank Talk is going to take a look at the market for loans guaranteed by the Veteran's Administration.

One of the benefits set aside for our Veteran's is the opportunity to utilize VA financing to buy a home. There are some significant advantages. For one, VA loans can still be had without a down payment. There's also the psychological benefit. While many people enter a bank branch unsure if they will be well-received by a lender, veterans can feel secure in knowing that there is a designated program to help them.

I've pulled data for all 2009 VA loan applications reported by institutions that are regulated by the Office of the Comptroller of the Currency. The OCC regulates national banks. Any lender where the acronym "N.A." is appended to their name is an OCC bank.

The VA market is no different from the rest of the field. Most VA mortgages come from just a few lenders.

Banks Impose New Wire Transfer Fees

Adam Rust's picture

Posted September 27, 2010

The big banks are creating ways to extract fees from their customers. High fees for domestic wire transfers are a new iteration on this emerging theme.

Wire transfers are generally the safest ways to move money through the banking system. In 2007, approximately $2.7 trillion changed hands through FedWire transfers in a typical day. Although banks charge a fee, the transfer is handled through the Federal Reserve. It provides the service to its members. The Fed charges banks $75 per month for the right to participate in the FedWire system. It also imposes a per transaction fee of between 19 and 30 cents per transfer, depending on the monthly volume of the institution.


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