The FDIC seized our local bank...what now?

Question

I understand my stocks all go to zero, does it also mean my note is due?  If this isn't the right place for this question, please redirect me.  Thanks in advance!

Jon Holdman · Answer

You say "all my stocks go to zero".  That would only apply to stock in the failed bank.  Do you you a actually directly own stock in that bank?

If the bank has a brokerage arm, and you've both stock through that brokerage, your stock holdings are unaffected.  You still own the same stocks as before.  The brokerage could continue to operate independently of the failed bank, or could be acquired by another bank.

What kind of "note" are you referring to?  If this is a mortgage on a property, a car note, or something like that, that note will just be purchased by someone else.  You will continue to pay it based on the existing terms.  If you mean a business line of credit, then it could well change. But the terms of the loan are still in effect.  If it has some call provision, it could be called.

Tell us more.

Lawrence H. · Answer

hi kyler
couple of things I need to know
 which state are you in
I am not sure how it works in the US with regards to funding but here you need to find another funder or you can go to some one like us ( now I will say us in a generic way as we do not operate in the US)
but people like us negotiate with banks or funders to take out the bank loans and you can do that direct as well as long as you can find a negotiatinggroup or company.
if the bank is fore closed thenits the same as if a house is foreclosed just a bit bigger
you are going to see this more in your market and rich what you are talking about I do here in sydney everyday of the week and work out a way of organising funding to come into fund out the finish off and also negotiate out a reduction in the first teir debt to allow for the higher cost of the cash finish off money.
it is a bit specialist but its there in your market
I for one would be very interested in the banks that are falling over
not sure who or how the banks would be held there ours are held by what we call liquidators or receivers and these are the guys I talk to multi time a week for different deals.
if the bank is to be resold or rebirthed then the only asset of the bank is the loan book.
what size of bank is this you are talking about is it a regional a community or major if you wish pm me or send me an email so I can disuss or send to rich and he can on forward to me.

Kyler Talbot · Answer

Thanks for your replies.

Another local bank has purchased the deposits and some of the branches but chose not to purchase any of the loans.  My loan was current as to the payments however it was maturing. At the time they locked the doors I had paid for my appraisal and was working with my loan officer on an extension. My loan is a residential land loan and is now matured.  It sounds like they will auction the loans.  As to the stocks, yes I did own stock in that bank.

Kevin, you mentioned purchasing my own note. That sounds interesting... How do you do that?

Kevin Yeats · Answer

What is the FDIC doing to dispose of your bank ... a liquidation (rare) or a sale to another bank?

In either case, some other entity now owns your note.  It could be the FDIC but likely the owner will be another bank.

Were you current on the loan and in compliance with the loan terms?  If so, you are in good position to continue with the new owner.  Obviously the new owner wants to get paid in a accordance with the loan terms.

Your best plan of action now is to make contact with the new owner and let them know that you plan on continuing your payments as scheduled.  The new owner may try to enforce a tighter schedule.

As a backup (and highly recommended), you should find another lender or investor to help you fund your needs.  The FDIC or the new owner could auction your note.  You could purchase your own note for a fraction of what you owe.

As Rich stated, it could also become very ugly for you if you don't have another source of funds.  Look today.

Good Luck

Rich Weese · Answer

Here is some info, although it is second hand. I have a friend here in Ft. Myers, FL that is building a couple million dollar plus homes in a project of 9 waterfront lots. He was about 50% complete on one and 30% through on the other. 
    It waas going OK until his bank was closed down and taken over by FDIC. He had subs unpaid as well as material to pay for. He has not been told a contact person with FDIC to converse with.  Subs have placed liens, filed suits and he has had the partially built homes deteriorate, with vandalism, etc. 
     This has been going on for nearly a year now and my friend has been going down the drain financially. It has been a real mess with no change in sight. Good luck on yours.Rich.

Kyler Talbot · Answer

Does anyone here have experience dealing with the fdic?? All I am getting is the company line saying I need to refinance with another bank to pay off the loan. What happens if I dont?  What is their process? I have also been told that they will sell these loans in some cases. If so, to who?  Any advice is appreciated.

The FDIC seized our local bank...what now?

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