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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
people, it is home to one of the three roasting facilities for Hampton Farms. Hampton Farms is a producer of ultra high quality Virginia peanuts. Their peanuts are sold throughout the country. They make a good share of the peanuts that are sold by concessionaires at any major league baseball game. Severn, which is located in Northampton County, is not the only local roasting facility. Hampton Farms has another in Edenton (Chowan County) and then one in Missouri.
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
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 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
Today's announcement by the IRS that it is canceling the debt indicator is very significant.
The debt indicator is what made the refund anticipation loan possible. Without it, banks would never have been able to tell if a tax filer had outstanding tax liens. Now that the IRS is ceasing to provide the debt indicator, the future of refund anticipation loans seems dim.
RALs were a big business. More than 470,000 North Carolina households spent almost $50 million on RAL fees in 2006 (according to research we did with the IRS' SPEC data).
The IRS' complicit involvement in the RAL business was undermining
The foreclosure crisis is not getting worse, but it is not getting much better. Foreclosure filings from the North Carolina Administrative Office of the Courts show that homeowners continue to struggle.Across the state, North Carolina is on pace for a 3 percent rise in foreclosures relative to 2009. Compared to the last ten years, the rate is up 53 percent.
The problems are most severe in three types of communities: in the kinds of beach and mountain communities that attracted the construction of vacation homes, in large metro areas, and where the loss of textile and tobacco jobs have not been replaced by new growth.
In some communities, foreclosures are actually down, even compared to the years before the real estate bust. More surprisingly, most of those counties are not well off at all. I have numbers from the last 13 years. I've tried to compare the rates in 2010 (annualized from the shortened calendar) to the average levels from 2000 to 2009. Unless otherwise noted, the two figures show the rate in 2010 compared to the decade average, and the increase from 2009 to 2010.
Big Metros with rapid population gains
Mecklenburg (Charlotte): up 60 percent over the last ten years, but down 18.1 percent this year.
It turns out that making a contribution to your individual retirement account (IRA) is pretty hard. Only about 1 in 14 tax filers in North Carolina takes advantage of the opportunity to protect your income from taxes.
This number comes from data that I found through the IRS. Only 7.4 percent of filers made an IRA contribution in 2007. That number includes people who made any kind of contribution to either a ROTH, a SEP, or a traditional IRA. During 2006 and 2007, contributors were allowed to put $4,000 in a Roth if they were under 50, and $5,000 if they were older.