Monday Morning Cup of Coffee: California housing market tightens, FDIC closes 2 banks

Source: Housingwire
By Brena Swanson

Monday Morning Cup of Coffee is a quick look at the news coming across the HousingWire weekend desk, with more coverage to come on bigger issues. Rep. Maxine Waters' disconnected feelings toward the financial industry have eased up, The New York Times reports. Not long ago, Waters became the ranking Democrat on the House Financial Services Committee, replacing Barney Frank, D-Mass. Waters developed the nickname "kerosene Maxine," for her tendency to hurl flammable remarks. But after a meeting in March with community bankers, participants said they were taken aback by Waters' concern and interest in what they had to say. "We’ve heard [regulators] chase down silly stuff," Waters said in the article. "I’m willing to take a hit to help lower the capital requirements." Waters is open to modifying, revisiting and clarifying the Dodd-Frank Act, but she is still firmly opposed to wholesale revisions. Cities choosing to cut back on police forces are unintentionally impacting property values, according to a study by John Burns Real Estate Consulting. The company surveyed almost 20,000 home shoppers and found that safety ranked above price when it came to important characteristics in purchasing a home. According to the real estate firm, demand is declining in certain cities and rising in neighboring cities due to deteriorating services such as police, fire and school quality. Cities that are pulling back on police forces tend to have a higher crime rate, which in turn causes people to choose neighboring communities. The California housing market is drastically tightening from a year ago, with house prices rising and affordability going down, an article in the Huffington Post said. For the first quarter of 2013, only 44% of buyers could afford a median-priced home costing $350,490 in California, down 56% from a year ago, the report said. Meanwhile, in the Los Angeles metro, 46% of buyers could afford the median-priced home costing $333,380, falling 56% from a year ago and from 50% in the fourth quarter. The Federal Advisory Council, which is made up of 12 bankers, warned the Federal Reserve that the student debt crisis is starting to mimic the housing bubble, according to an article in USA Today. Fed Chairman Ben Bernanke has dismissed continuously parallels between student lending and the subprime mortgage crisis. However, bankers cautioned that just as the mortgage-lending boom pushed home prices upward, student loan lending has put upward pressure on tuition, the article claims. Student loan debt has nearly reached $1 trillion, due to a significant growth in subsidized lending in pursuit of a social good—higher education. The Federal Deposit Insurance Corp. shut down two banks at the end of last week Sunrise Bank, located in Valdosta, Ga., was closed by the Georgia Department of Banking and Finance, which named the FDIC as the receiver. To ensure the depositors have a place to access their accounts, the FDIC entered into an agreement with Synovus Bank in Columbus, Ga. Additionally, Pisgah Community Bank in Asheville, N.C., was closed by the North Carolina Office of the Commissioner of Banks, which appointed the FDIC as the receiver. All deposits will be transferred to Capital Bank, National Association, located in Rockville, Md.

URL to original article: http://www.housingwire.com/news/2013/05/12/monday-morning-cup-coffee-california-housing-market-tightens-fdic-closes-2-banks

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