323 Compliance

South Carolina and North Carolina among Five Least Safe Banking Markets

noreply@blogger.com (MBD) — Mon, 09 May 2011 17:35:00 +0000

- BestCashFlow.com

Builders who specialize in home remodeling are seeing a better market than they have in years according to the National Association of Home Builders' (NAHB) Remodeling Market Index (RMI) released on Friday. The index rose to 46.5 in the first quarter of the year from 41.5 in the fourth quarter of 2010.

The current RMI is the highest the index has been since the fourth quarter of 2006.

The RMI is based on builders' perceptions of current remodeling activity and on indicators of future activity such as calls for bids. In addition to the RMI there is an index reflecting each of its two components. Any score of less than 50 indicates more respondents view the market activity as lower (compared to the prior quarter) than report that it is higher.

ARTICLE SHORTENED DUE TO LENGTH….

LINK TO ARTICLE HERE

Former Chief Credit Officer of a Failed Bank Banned From Working in the Banking Industry

noreply@blogger.com (MBD) — Tue, 05 Apr 2011 13:40:00 +0000

- Atlanta Business Chronicle

The former chief credit officer of a failed north Georgia community bank who faces criminal charges has been banned by federal regulators from working in the banking industry.

Robert R. “Randy” Jones, a former executive vice president of Community Bank & Trust of Cornelia, agreed to the Federal Deposit Insurance Corp.’s prohibition order on Feb. 24, and the agency released the order on March 25.

Jones faces federal criminal fraud charges for his involvement in making real estate loans.

Community Bank & Trust also made loans, under Jones’ watch, to an outdoors-retail store that was developed by the daughter and son-in-law of Ga. Gov. Nathan Deal.

ARTICLE SHORTENED DUE TO LENGTH….

LINK TO ARTICLE HERE

Short Sales...A Breeding Ground for Fraud?

noreply@blogger.com (MBD) — Mon, 03 Jan 2011 15:34:00 +0000

- DS News

With defaults continuing to mount and declining property values still widespread, the industry is seeing an increase in short sales. Such transactions are expected to burgeon even further now that the federal government has implemented its Home Affordable Foreclosure Alternatives (HAFA) program.

Under HAFA, servicers participating in the administration’s foreclosure prevention effort are required to consider a short sale for all homeowners that don’t qualify for a modification, and incentives are paid out to borrowers, servicers, and lien holders for successful short sales.

With the new policies and still-precarious market conditions, short sales are gaining in popularity among lenders and distressed homeowners alike, but as with any modus operandi that rapidly picks up steam, this proliferation can open the gate for fraudulent activity.

ARTICLE SHORTENED DUE TO LENGTH….

LINK TO ARTICLE HERE

FDIC Brings 2nd Legal Action against Directors & Officers of Failed Bank

noreply@blogger.com (MBD) — Thu, 02 Dec 2010 20:06:00 +0000

- ABA Banking Journal

By Thomas P. Vartanian, Robert H. Ledig, and Lawrence Nesbitt, of the Financial Institutions Practice at Dechert LLP, Washington, D.C . For more information, see the author’s note at the end this article.

Industry observers have been waiting to see when bank failures arising out of the recent financial crisis would produce a wave of FDIC litigation similar to that seen in the early 1990s after the savings and loan crisis. With its second suit in recent months, FDIC has shown that it will aggressively pursue claims against directors and officers in connection with failed depository institutions.

FDIC has significantly increased its legal staff in the last few years and has engaged outside law firms to perform professional liability investigations and to conduct litigation in connection with recently failed institutions.

ARTICLE SHORTENED DUE TO LENGTH….

LINK TO ARTICLE HERE

Banking Humor: Just Poking a Little Fun at Troubled Banks

noreply@blogger.com (MBD) — Wed, 10 Nov 2010 14:41:00 +0000

FDIC Says Failed Spartanburg Bank Attracts Many Bids

noreply@blogger.com (MBD) — Tue, 02 Nov 2010 18:10:00 +0000

- scbiznews.com

Six banks placed bids to buy First National Bank of the South, which federal regulators closed in July, according to records released Monday by the Federal Deposit Insurance Corp.

According to the FDIC, two banks with S.C. headquarters submitted competing bids: First Federal Savings and Loan of Charleston and First Citizens Bank and Trust of Columbia.

Other bidders were Ameris Bank of Moultrie, Ga., Bank of the Ozarks of Little Rock, Ark., and First Community Bank of Bluefield, Va.

North American Financial Holdings of Charlotte submitted the winning bid and acquired the bank in July in a transaction assisted by the FDIC.

ARTICLE SHORTENED DUE TO LENGTH….

LINK TO ARTICLE HERE

Quote of the Day - J. Paul Getty

noreply@blogger.com (MBD) — Mon, 18 Oct 2010 21:24:00 +0000

"If you owe the bank $100 that's your problem. If you owe the bank $100 million, that's the bank's problem." - J. Paul Getty

Is the FDIC Staking Out Its Territory or Extending Its Borders?

noreply@blogger.com (MBD) — Fri, 08 Oct 2010 14:57:00 +0000

- The D & O Diary

With one lone exception, the FDIC has not yet itself pursued litigation against the directors and officers of a failed financial institution. However, the FDIC has already made it clear that it intends to assert its rights under FIRREA as the receiver of failed banks to take control of shareholders’ derivative lawsuits.

More recently, and perhaps more aggressively, the FDIC is now attempting to intervene in two direct shareholder actions where failed institutions’ aggrieved investors are asserting their own claims, rather than derivatively asserting those of the failed institution. These more recent moves may represent efforts not just to assert but to extend the FDIC’s litigation preclusion rights. The FDIC’s actions are interesting in and of themselves, but also for what the FDIC has claimed in asserting its rights.

ARTICLE SHORTENED DUE TO LENGTH….

LINK TO ARTICLE HERE

Beware of the One Man Banks

noreply@blogger.com (MBD) — Wed, 22 Sep 2010 12:59:00 +0000

You have to love these portions of the recent FDIC OIG report on the collapse of Florida Community Bank (page 6).

"At that time, he originated 80 percent to 90 percent of the loans, wrote most of the bank’s policies, conducted a majority of in-house appraisals and outside appraisal reviews, and managed the bank’s daily affairs."

"The CEO was abetted by the Board. The Board did not adequately exert its authority, and Board members did not have sufficient CRE expertise to question the judgment of the CEO. There was no apparent effort to seek new Board members to complement the bank’s geographic expansion into the major metropolitan areas of Southwest Florida, or to change the CRE lending emphasis."

Beware of the one man banks.

LINK TO REPORT HERE

Note the Date on the Cartoon......Pretty Good

noreply@blogger.com (MBD) — Mon, 30 Aug 2010 15:43:00 +0000

A Little Bank Board Humor.....

noreply@blogger.com (MBD) — Mon, 09 Aug 2010 12:57:00 +0000

Need Help With Your Real Estate Appraisal Policy?

noreply@blogger.com (MBD) — Fri, 06 Aug 2010 12:59:00 +0000

I think this blog post on the ABA Banking Journal site is good, and agree that individual bank policies are more important than ever. If we can assist with your real estate appraisal policy, please let me know.

LINK TO BLOG POST

Michael Dodds, MAI, CCIM, MRICS

Here We Go....FDIC Files First D&O Suit of Current Failed Bank Wave

noreply@blogger.com (MBD) — Mon, 19 Jul 2010 18:28:00 +0000

On July 2, 2010, the FDIC filed a lawsuit against former directors and officers of IndyMac's Homebuilder Division. While I have not read the entire document, I did do a search for the word “appraisal.” Excerpts from the document include:

- "negligently approving loans with inadequate appraisals"

- "The function of credit officers was not separate from the function of production groups, and appraisals were not being properly obtained"

- "Causing or allowing a loan to be made, renewed, and/or extended with inadequate or problematic appraisals"

Obviously, IndyMac was not in compliance with Part 323 FDIC Laws and Regulations. If you are a banker, or bank director, that has concerns about Part 323 compliance, e-mail me at mdodds@irr.com. Our appraisal process management division was designed to address appraisal independence issues that lending institutions are experiencing.

Michael B. Dodds, MAI, CCIM, MRICS

COMPLETE DOCUMENT HERE

Appraisal Red Flags For Bank Examiners When Reviewing Appraisals

noreply@blogger.com (MBD) — Tue, 25 May 2010 16:44:00 +0000

- No appraisal or property evaluation in file.
- Mortgage broker or borrowers that always use the same appraiser.
- Appraiser bills association for more than one appraisal when there is only one in the file.
- Unusual appraisal fees (high or low).
- No history of property or prior sales records.
- Market data located away from subject property.
Unsupported or unrealistic assumptions relating to capitalization rates, zoning change, utility availability, absorption, or rent level.
- Valued for highest and best use, which is different from current use.
- Appraisal method using retail value of one unit in condo complex multiplied by the number of units equals collateral value.
- Use of superlatives in appraisals.
- Appraisal made for borrower.
- Appraisals performed or dated after loan.
- Close relationship between builder, broker, appraiser, lender and/or borrower.
- Overvalued (inflated) or high property value.

Office of Thrift Supervision May 2010 Examination Handbook 360.1

Hiding Appraisals from Regulators is Not a Good Idea

noreply@blogger.com (MBD) — Fri, 14 May 2010 18:21:00 +0000

What was this guy thinking?

A former executive at the failed Bank of Clark County is scheduled to be sentenced today in Tacoma, Wash., for hiding information from Federal Deposit Insurance Corp. examiners.

David S. Kennelly, who was chief credit officer until he was fired in November 2008, pleaded guilty on Feb. 19 to a felony scheme to conceal a material fact. In his guilty plea, he admitted to hiding appraisals on 23 real-estate backed loans that revealed looming problems at the Vancouver-based bank. Federal prosecutors have asked U.S. District Court Judge Robert J. Bryan to sentence Kennelly to six months of incarceration, probation and a $10,000 fine

LINK TO ARTICLE HERE

Disgruntled Shareholder Sues Bank to Gain Access to Records

noreply@blogger.com (MBD) — Fri, 30 Apr 2010 13:47:00 +0000

- The Island Packet

A shareholder who says he is concerned about the direction of CoastalStates Bank is urging fellow investors to "hold management accountable for their actions and ask questions" during an annual meeting Wednesday on Hilton Head Island.

George N. Snelling of Augusta, Ga., placed advertisements in Sunday's Island Packet and Beaufort Gazette. In the ads, he says he is the largest individual shareholder of the Hilton Head-based bank's parent company, CoastalSouth Bancshares, and has sued to gain access to the bank's records.

ARTICLE SHORTENED DUE TO LENGTH….

LINK TO ARTICLE HERE

America's Mortgage Fraud Capital? New York, N.Y.

noreply@blogger.com (MBD) — Tue, 27 Apr 2010 18:20:00 +0000

- housingwatch.com

Start spreading the news: New York City -- home to embattled investment banks and notorious fraudster Bernie Madoff -- has another infamous distinction to add to its list. According to a new report, the metro area is the nation's leader for mortgage fraud in 2009.

As cases of fraud skyrocketed across the country last year, New York City rose to the top, claiming 12 percent of the nearly 70,000 reports of suspicious activity filed nationwide; this according to a report by LexisNexis. Los Angeles came in second with 8 percent and Chicago was third with 5 percent.

ARTICLE SHORTENED DUE TO LENGTH….

LINK TO ARTICLE HERE

Nonperforming Loan Market Still Not Performing

noreply@blogger.com (MBD) — Wed, 14 Apr 2010 16:09:00 +0000

- GlobeSt.com

Most would-be investors in distressed debt think the market for such debt hasn’t gotten up to speed, with 76% of respondents to an Ernst & Young survey saying the market is “still developing” and another 13% opining that it hasn’t even begun. So it stands to reason that while all respondents to the E&Y survey did due diligence on nonperforming loan portfolios during 2009, fewer than 17.5% actually completed a purchase.

The reason: there wasn’t enough distress to go around, writes E&Y’s Mark Grinis and Christopher Seyfarth in a report released Monday. "Up until now, most, but not all, banks have not been engaged in selling distressed loans," leaving the FDIC to take the lead, according to the report.

ARTICLE SHORTENED DUE TO LENGTH….

LINK TO ARTICLE HERE:

Beach First Bank Places First in South Carolina Race

noreply@blogger.com (MBD) — Sun, 11 Apr 2010 15:40:00 +0000

Beach First Bank becomes the first South Carolina bank to fail - who will be the second?

Subscribe to Receive 323 Compliance News

noreply@blogger.com (MBD) — Mon, 05 Apr 2010 16:55:00 +0000

Please follow the link on the upper right side of the web page to subscribe to e-mail updates. We update our blog several times per week and you will receive a summary of the new posts on those days. Of course you can unsubscribe at any time.

Note: I don't use any ad tracking or the like, nor do I sell e-mail addresses to anyone!

Michael Dodds, MAI, CCIM, MRICS

What Exactly Does 323compliance Do?

noreply@blogger.com (MBD) — Wed, 31 Mar 2010 17:03:00 +0000

Interesting question......

323compliance is basically a divison of Integra Realty Resources - SC that provides appraisal process management, appraisal reviews and assistance with establishing FDIC compliant appraisal procedures. Our services are certainly not right for every bank, but community banks have responded very well to our knowledge of Part 323 of the FDIC Laws and Regulations, otherwise known as Appraisal Independence.

When I first started marketing the Appraisal Process Management (APM) program, I expected to hear mainly from banks that had, as one banker stated, "been smacked around by the FDIC." Surprisingly, one of the first bankers to sign up for our program told me that he "just wanted higher quality appraisals" and that the examiners had never had a problem with their appraisal procedures.

We offer a very flexible service program, from working as a consultant to assemble a strong approved appraiser list, to procuring appraisals on behalf of banks.......or just providing technical appraisal reviews of select commercial appraisals. Please e-mail me at mdodds@irr.com if we can assist.

Michael Dodds, MAI, CCIM, MRICS

FDIC Humor: Do You Speak the FDIC Language?

noreply@blogger.com (MBD) — Wed, 31 Mar 2010 08:42:00 +0000

The banker fell overboard... (humor)

noreply@blogger.com (MBD) — Fri, 26 Mar 2010 17:16:00 +0000

The banker fell overboard from a friend's sailboat.

The friend grabbed a life ring, held it up, not knowing if the banker could swim, and shouted, "Can you float alone?"

"Obviously," the banker replied, "but this is a heck of a time to talk business."

Are Your Approved Appraisers Licensed? Really? Are You Sure?

noreply@blogger.com (MBD) — Wed, 24 Mar 2010 23:00:00 +0000

An unlicensed appraiser was able to submit numerous fraudulent appraisals to a mortgage brokerage company in Pennsylvania, which were then used to secure financial loans. The case has been back in the news as one of his fellow participants pleaded guilty to charges of wire fraud conspiracy and filing false tax returns. John Polosky, a loan officer for First Capital Home Equity, accepted fraudulent appraisals from Kenneth Cowden, an unlicensed appraiser. Cowden had plead guilty in July, 2007, in federal court in Pittsburgh to two counts of failing to file income tax returns.
LINK TO ARTICLE HERE
We constantly monitor the approved appraiser lists of our 323compliance clients to ensure that their approved appraisers are appropriately licensed and maintain errors and omissions insurance. Proper approved appraiser list management is a vendor management responsibility. The FDIC takes that very seriously.........
E-mail me if I can help

Michael Dodds, MAI, CCIM, MRICS

Too Little.....Too Late

noreply@blogger.com (MBD) — Thu, 18 Mar 2010 20:33:00 +0000