If PNC wants to make a splash in North Carolina, it would do well to finding a way to turn around the record established by RBC when it comes to making loans to farmers. A good portion of eastern North Carolina’s economy is driven by agriculture. It would not be a stretch to say that most of the money in the area is a product of farming.

Severn is a good example. Even though Severn only has about 1,000 (more…)

A day of reckoning is coming for some communities in eastern North Carolina. With the planned sale of RBC Centura to PNC, the possibility exists that branches will close. In big cities like Raleigh, Charlotte, or Greensboro, the loss of a branch is a minor event. But in eastern North Carolina, the RBC branch is the only bank in town. If the people in Pittsburgh decide that one of their branches is redundant, then there will be no bank at all.

The FDIC says that RBC is the only bank in seven communities in North Carolina. Each is located in Northeastern North Carolina. In cities like Colerain or Rich Square, RBC is the only bank in town.  RBC was born in Eastern North Carolina and its continued involvement in the area probably reflects their long-term commitment to the area.

It isn’t clear that PNC will share those same commitments. PNC may close branches. They might curb the extent to which they engage the small businesses in the area as well as the degree of commitment they make to community development lending. PNC hasn’t spoken about the issue. My initial comment on this situation is available here.

If PNC closes the Rich Square branch, the nearest choice will be to take the country roads out of Northampton County and drive southeast to the Southern Bank & Trust in Aulander. The nearest RBC is back in Jackson, which is almost 20 (more…)

Two large mortgage insurance (“MI”, also “PMI”) companies face a deadline from the state of North Carolina, which if breached would mean that they would no longer be able to write MI in the state.

North Carolina imposes capital requirements on mortgage insurers. In general, they want an MI company to have a very sound financial position.

There are only 8 active mortgage insurance firms in the United States. One, CMG, is primarily focused on (more…)

More home buyers are seeking mortgage loans backed by FHA guarantees.

I have been looking at lending patterns in my own community – Durham, North Carolina – and the 2009 numbers paint an interesting picture that suggests a dual marketplace. One group – white and Asian borrowers – continues to eschew the FHA program in favor of conventional loans. Another, made up almost entirely of African-American borrowers, is turning to the FHA program. What is more interesting is the extent to which the sudden switch is unaffected by borrower income. Even well-off African-Americans are flocking to FHA.

I ran a chi-square that sorted borrowers by their race or ethnicity and by their incomes. Incomes were separated (more…)

President Obama says that he will nominate Joseph Smith, the current North Carolina Commissioner of Banks to become the new leader of the Federal Housing Finance Administration.

It is one more instance of how the progressive leadership in North Carolina is moving to Washington to take on the big banks.  Smith’s understudy, Mark Pearce, was recently named to a new position at the FDIC, where he will supervise consumer protections at the 8,000 financial institutions under the regulatory purview of the FDIC.  Eric Stein, formerly an attorney at the Center for Responsible Lending, has been working as the Deputy Assistant Secretary of Consumer Protections at the Department of the Treasury for more than a year.In that time, he has been the champion of the Consumer Financial Protection Bureau.

Smith will have an opportunity to shape reform of the GSEs.