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Westmoreland's bill to look into bank failures passes committee

Published Thursday, July 21, 2011 in Local

From Staff Reports

news@newnan.com

WASHINGTON, D.C. -- On Wednesday, the House Financial Services Committee marked up and passed H.R. 2056, legislation introduced by Congressman Lynn Westmoreland( R-GA-Third District) that would require the FDIC to conduct a study of its practices and procedures and the impact they may be having on banks in 10 states with the highest number of bank failures.

Those 10 states are Arizona, California, Florida, Georgia, Illinois, Michigan, Minnesota, Missouri, Nevada, and Washington.

Georgia currently leads the nation in bank failures since 2008, with 17 already occurring this year.

"Community banks are the economic engine of our towns and cities," stated Westmoreland. "They provide much needed credit for small business owners to invest and expand. They provide loans to new families looking to purchase their first home. They offer lines of credit to farmers and construction companies. Without these local lenders, job growth and economic investment can dry up -- an unmistakable reality proven by the fact that the 10 states with the highest number of failures also have some of the highest unemployment and foreclosure rates in the country."

Specifically, the legislation instructs the Inspector General of the FDIC to look into the effect of loss-share agreements (LSAs), the impact of consent orders and cease and desist orders, how the practice of using paper losses may have affected institutions, and other practices they use when dealing with troubled or failing institutions.

The Inspector General must submit the results of the study within one year of passage of the legislation.

In addition, the committee approved a manager's amendment offered by Westmoreland. The amendment added appraisals and capitals as issues to study and allows the FDIC Inspector General to coordinate with the Department of Treasury Inspector General and the Federal Reserve Inspector General. The manager's amendment adds a second study to be conducted by the General Accountability Office.

"Bank failures across the country continue to hamper our economic recovery," said Westmoreland. "Georgia has been particularly hard hit, with 67 bank failures since 2008. If you crunch the numbers, that means about 25 percent of Georgia's banks have failed in the last three years. That has a devastating impact on Georgia's ability to recover from the economic recession. My bill will look into whether the FDIC's practices and procedures -- specifically loss-share agreements and paper losses -- have harmed banks more than they've helped.

Fannie Mae says InterNACHI members are qualified to do their loan ...

Not have a financial interest in the Property inspected; demonstrate experience in multifamily real estate property inspections; be experienced in the market in which the Property is located; and either: possess a current professional certification from any one of the following: Real Estate Assessment Center (HUD) as a Certified Home Inspector, or American Society of Home Inspectors ( ASHI ) , or State certified home inspector; or be a Registered Architect (RA), or be a Civil Engineer,or the inspector must have successfully completed acceptable training courses in lieu of the above. Acceptable training courses include the Property Inspection Risk Management course provided by Fannie Mae or the Fannie Mae approved inspection course provided by the Mortgage Bankers Association (MBA). The third-party inspector must notify the Servicer of any Property health and life safety issues within 48 hours after completion of the inspection. The third-party inspector cannot reassign responsibilities to another entity without the Servicer’s approval. Fannie Mae reserves the right, in its sole discretion, to notify the Servicer if the work product of any third-party inspection firm is no longer acceptable to Fannie Mae.

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