Final count of 2010 bank failures at 157

From Deposits.com

This year ended with 157 bank closures which was 17 more than failed last year. The number of bank failures grew considerably when the financial crisis began in 2008. The number of failures went from 3 in 2007 to 25 in 2008. It's hard for me to remember the days before 2008 when bank failures were rare.

Depositors with large savings have a little less to worry about in terms of bank failures. The FDIC $250K coverage limit became permanent when the Dodd-Frank Wall Street Reform and Consumer Protection Act became law in July. This same coverage limit also applies to NCUA-insured credit unions.

So, how does this translate to the average homeowner? 

The main issue for depositors when banks fail is the loss of the high interest rate on their existing CDs. By law the acquiring banks are allowed to lower the interest rates on existing CDs. Many of the acquiring banks did make use of this allowance. The depositors are free to close the CDs without a penalty, but in today's interest rate environment, it's impossible to replace those CDs with new ones with the same high rates.

To see a list of failed banks and the full report, go to Review of the 2010 Bank Failures and Their Effects on Depositors

For your next title order or

if you have questions about what you see here, contact

Stephen M. Flatow, Esq.

Vested Title Inc.

165 Passaic Avenue, Suite 101

Fairfield, NJ 07004

Tel 973-808-6130 - Fax 201-656-4506

E-mail vti@vested.com - www.vested.com

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A sign of the economy - Nervous Americans want easy access to their cash

From the Associated Press:

Nervous Americans want easy access to their cash
By Pallavi Gogoi

NEW YORK — Americans want to be close to their cash.

People are bailing out of bank certificates of deposit and parking their cash in checking and savings accounts that earn little or no interest but also don't exact penalties for early withdrawal.

It's another signal of how nervous Americans are about their finances as the U.S. economy struggles. Consumers are stuck with few options to make their money work. The Standard & Poor's 500 is down 0.5 percent for the year, one big reason why people have pulled a net $145.3 billion out of mutual funds in the first eight months of the year, according to Lipper Inc.

Why? "At times of uncertainty, there is a natural human tendency to stay liquid and have money easily accessible," says Dan Geller, executive vice president at financial data analysis firm Market Rates Insight.

A CD commonly carries an interest rate for a fixed term ranging from three months to five years. Depositors typically pay a penalty if they withdraw their money prior to the end of the CD's term.

"Interest rates on short-term instruments like CDs are so low, why bother when you can leave money in the bank?" says Martin Feldstein, professor of economics at Harvard University.

This is not a stand-alone phenomenon: As American households spend less, chances of higher economic activity and a healthy recovery continues to diminish. It's no surprise that overall deposits in U.S. banks fell for two consecutive quarters for the first time in two decades.

Read the full article and make up your mind whether you want to stay in certificates of deposit.

For your next title order or

if you have questions about what you see here, contact

Stephen M. Flatow, Esq.

Vested Title Inc.

165 Passaic Avenue, Suite 101

Fairfield, NJ 07004

Tel 973-227-4724 - Fax 201-656-4506

E-mail vti@vested.com - www.vested.com

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