Largest Bank failure of the year today

By
Mortgage and Lending with National Credit Fixers - Matt Listro

It was the 34th bank failure of the year but the LARGEST one so far this year.  Today BankUnited has been seized.  BankUnited Federal Savings Bank had $13 billion in assets as of May 2.  BankUnited was based in Florida and is Florida's largest bank.

Under the FDIC insurance program, deposits are covered up to $250,000.  This bank failure is expected to cost the already depleted fund $4.9 billion.  My longtime blog readers may remember I wrote a previous post about this topic and I cited that the FDIC Fund only had $18.9 billion at the end of 2008.  After the 34 bank failures - I wonder how much is left?  The FDIC has raised the fee banks pay for FDIC insurance in an attempt to raise money for the fund.  In addition, Legislation passed by Congress just this week allows for the FDIC to borrow up to $100 billion from the Treasury Department "if needed" to replenish the fund. 

BankUnited was bought by an investor group for $900 million and will re-open Friday (that's today) as a newly chartered Federal Savings Bank called -- BankUnited - sounds familiar doesn't it?  Customers of BankUnited FSB will still be able to write checks and uses their credit/debt cards with the new bank.

Let's put things in perspective for a moment.  34 bank failures through this year and we are not even halfway through the year.  Last year there were only 25 failures all year and only 3 in 2007!  The FDIC insurance fund was not designed for the amount of claims it is receiving.  In addition when they increased the insurance to cover deposits up to 250,000 temporarily in 2008 (remember it use to be only 100,000) - that has exacerbated the claims being filed this year. 

How long do you think it will be before the FDIC needs to get a bailout of its own?

:)
Matt

Toll Free: 888-NCFIXER (623-4937)
Toll Free Fax: 888-FAX-4020 (329-4020)
Local: 860-282-6181
330 Roberts Street 4th Floor
East Hartford, CT 06108

credit repair company

Posted by

Matt

Toll Free: 888-NCFIXER (623-4937)
Toll Free Fax: 888-FAX-4020 (329-4020)
Local: 860-282-6181
281 Hartford Turnpike Ste 500

Vernon CT 06066

credit repair company

Comments (13)

Goodbye Active Rain
Out of Real Estate

I knew this was going to happen.  A business partner and his group was looking to submit a bid for BankUnited last year.  Expect more bank faliures as the Alt A loans will re-set this year and the Option Arms will start to recast. 

May 22, 2009 03:56 AM
Matt Listro
National Credit Fixers - Matt Listro - Vernon, CT
Your Credit Repair Expert

Hi Tony: This failure is a reminder that everything is not honkydorry yet (that's the techinical term).

:)

May 22, 2009 03:58 AM
Elizabeth Bolton
RE/MAX Destiny Real Estate Cambridge, MA - Cambridge, MA
Cambridge MA Realtor

Hi Matt ~ Yikes - I hadn't heard this.  Every time I learn about another bank failure I remember the This American Life segment that was on recently about the government crew that goes in to shut the bank down.  Did you catch that?  You can probably find the segment online I would imagine.

Liz

PS - love your technical jargon

May 22, 2009 04:12 AM
Matt Listro
National Credit Fixers - Matt Listro - Vernon, CT
Your Credit Repair Expert

Hi Liz: No - I missed that one but I'll bet it was amazing. 

:)

 

May 22, 2009 04:19 AM
Mike Eddy
Coldwell Banker Island Properties - Wailea, HI
Maui Real Estate Broker

Matt - I would have to agree with you. Most recently we have seen signs of improvement, but I feel it's still too soon to expect the bleeding to stop.

Mike

May 22, 2009 05:28 AM
Matt Listro
National Credit Fixers - Matt Listro - Vernon, CT
Your Credit Repair Expert

Hi Mike & Sheryl:  I agree that we have seen signs of improvement.  I would also agree that we are out of the woods as far as an "economic collapse".  What I think though is it is to quick to think that the recession will be ending this year.

:)

May 23, 2009 02:06 AM
Tammy Lankford,
Lane Realty Eatonton, GA Lake Sinclair, Milledgeville, 706-485-9668 - Eatonton, GA
Broker GA Lake Sinclair/Eatonton/Milledgeville

Matt- maybe the FDIC can just borrow some money from China??!!  It's sad and we just keep on treading water and there is no land in sight.

May 24, 2009 07:28 AM
Matt Listro
National Credit Fixers - Matt Listro - Vernon, CT
Your Credit Repair Expert

HI Tammy: Did you say China?  Did you know their is an Internet movement which is asking America to boycott all products from China between June 4th and July 4th?

:)

May 25, 2009 02:33 AM
Tammy Lankford,
Lane Realty Eatonton, GA Lake Sinclair, Milledgeville, 706-485-9668 - Eatonton, GA
Broker GA Lake Sinclair/Eatonton/Milledgeville

I have been avoiding products made in China for about 3 or 4 years now.  They pissedticked me off when they ripped off our plane and disassembled it.  Frankly I didn't watch the Olympics because they were in China.  I don't know how to do it, but I want my country back.  And yes, I did see the circulating email about don't buy made in China stuff for the month.  I don't think it's actually going to occur, but I participate EVERY DAY!

May 25, 2009 03:17 AM
Matt Listro
National Credit Fixers - Matt Listro - Vernon, CT
Your Credit Repair Expert

Hi Tammy: I agree!

:)

May 25, 2009 03:41 AM
Russel Ray, San Diego Business & Marketing Consultant & Photographer
Russel Ray - San Diego State University, CA

Hey, Matt. Something's not sounding right here.

Why would a bank with a mere $13 million in assets cost the FDIC $4.9 billion. That doesn't add up and all. And I cannot believe at all that BankUnited, with a mere $13 million in assets, was Florida's largest bank. That doesn't add up either. What kind of dumb investors would pay $900 million for a bank that only has $13 million in assets? That also doesn't add up.

Should your "$13 million" actually be "$13 billion?" That would add up.

May 25, 2009 04:58 AM
Tammy Lankford,
Lane Realty Eatonton, GA Lake Sinclair, Milledgeville, 706-485-9668 - Eatonton, GA
Broker GA Lake Sinclair/Eatonton/Milledgeville

Russel you are good.  I missed that typo.  It was billion and not million.  Here is the story.

May 25, 2009 03:26 PM
Matt Listro
National Credit Fixers - Matt Listro - Vernon, CT
Your Credit Repair Expert

Hi Russel: Big Whoops - It should have read 13 Billion in assets - I will change it! You Rock!

Hi Tammy: You rock too!

:)

 

May 26, 2009 02:12 AM