As expected, the doom and gloom continues with banks going out and shutting down. This could be just part of the mortgage fix and get better program, but it is still really depressing.

 

·         This week Citizens Bank, a small bank in New Jersey failed, America West Bank (Utah) and Eastern Financial Florida Credit Union went out. Rumors are flying in the industry that now the small to medium size local banks will begin to fail. It was just a matter of time until the auditors got to examine their books, now that they are done with the large national lenders.

 

·         Today, Wells Fargo Bank shut down its small commercial mortgage division. This division was very helpful for the small business owner and local investor because it offered mortgages under 1 million dollars in commercial money- which was a nice niche. Does this mean that small commercial mortgages are going to fall away just as the residential market? That has been the prediction.

 

·         The street reported that Chase Home Mortgage shut down its construction division, which supplied an average of 100 million dollars a month for builders and homeowners. Now, it is even harder to get a construction loan for residential housing, than ever before. Typically, once one of the national lenders pull out of a market, most of the smaller lenders follow out of fear. As they say, no one wants to be last man standing.

 

·         Lastly, and most scary, I have been picking up on rumors that the FHA is going to be temporarily shut down in order to regroup. Some politicians are predicting a failure of the FHA and are demanding that it be shut down before it collapses. If this were the case, the real estate industry will be in for a huge drop. I cannot imagine that happening, but can see the FHA pulling tighter on their guidelines.

 

 

The Mexico City Metropolitan Cathedral is the largest and oldest cathedral in the Americas and I will not be visiting it this month (as planned). Built in sections, beginning in 1573, it sits atop of ancient Aztec sacred soil. One of the most visited sites in the world; it had been closed for public services for the first time in its history. In order to reduce the spread of swine flu through large crowds, churches and sport stadiums have remained empty. In addition, I will not be seen in Mexico City at the end of the month- much to my sadness.

 

Wow, I am depressing.  Maybe, it is the lousy weather in New York.

 

 

Dale Siegel