Chase and Wells Fargo Waiving Some Fees

In a world where bank fees are on the rise, Chase Bank and Wells Fargo are waiving overdraft, late payment and other fees for customers in states impacted by Hurricane Irene (Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, North Carolina, Pennsylvania, Rhode Island, Vermont and Virginia). For instance, customers who can no longer get to a Chase ATM might have to use one from another bank.



Nice customer move.

- JSM

Tales of a Homeowner Wanna-Be

Part of my adventure of moving to Miami, Florida to join the faculty at St. Thomas University School of Law involves the purchase of a new home. Yes, I've already written about the beginning of this journey (See Tales of a Prospective Homebuyer). That was back in April! So, what is it really like? Three months later? Well, I am just a week out of closing and don't have an "official," "final" loan approval yet for the mortgage. There was the "first application," the phone interview, the mass of financial documents for the last two years, the changing loan terms, the worry over the home appraising (this is South Florida after all).

Other parts of this adventure? I since discovered that the seller had been behind on taxes and the house was listed for auction, but was just brought current in the last two weeks. There is also a pending issue on a leaking roof that I was told was fixed, but when I had the roof re-inspected found out the broken parts were just glued together! My prospective insurance agent raised the hazard insurance premium by 50% on the spot, even though his quote was only two weeks ago (found new insurance agent!). The new challenge is the documentation on the purchase funds for the mortgage lender, which is very particular.

Seriously, the days of no-documentation loans seem to be past, as far as I can see (See, The Basics: No Doc Mortgages, MSN). So, things are naturally hard out there from a loan perspective. Perhaps they should be . . . The large number of foreclosures and short sales out there also make it difficult for home buyers, even though prices can sometimes be favorable. My limited experience in shopping around for lenders indicates that while mortgage rates might be good (See, Mortgage Rates on 30-Year US Loans Fall to Record), the lenders are being more careful than in the past making it harder to purchase even if you want to in this market. But, with the housing market plunging after the government incentives for home buyers ended in April (See, Pending Home Sales Fell off A Cliff, CNN), one might expect things to be easier on buyers.

In some ways it is easier than back in April. For instance, it was much easier to secure a contract on a home than a couple of months ago. But closing is still difficult. While I have every hope that the home will close on time, my skills as a detail, paper-collecting transactional lawyer have served me well! There is now talk of what "time of day" we might be closing, so the hope is that this homeowner wanna-be will actually be just plain homeowner soon.

-jsm

Citibank's Promise of Free Checking

What does it mean to be free? When many of us open up a new checking account, it is with the intention of doing business with that bank for a period of time. After all, I've not got my online banking set up to send up bill payments. I've ordered printed checks for when I need them. I've got my debit card. It is a hassle to switch banks and have to redo all this. So, it is important that banks disclose account fees at the outset.

So might have believed customers over at Citibank who opened checking accounts advertised as free. Despite the free-hook, Citibank announced that it would begin imposing account fees on these same customers. Apparently about 1 million free accounts were included. The Truth In Savings Act requires banks to disclose account fees. So, free means free. Moreover, one might expect the free status to last for some time. Not surprisingly then, New York Attorney General Andrew Cuomo's office complained about the Citibank fee increase. Today, Citibank announced that free will remain free, putting aside overdraft and other fees, for the time being. (See Citibank to Keep Free Checking).

- JSM

The Politics of Bernanke's Reappointment

The Senate today confirmed Chairmen Bernanke's reappointment to a second term at the Federal Reserve by a vote of 70 to 30 (See Bernanke Confirmed). As concerns abounded about the extent of the Federal Reserve's independence, Senator Schummer commented: “If you don’t like monetary policy when the Fed does it just wait until the politicians get their hands on it.” Well said. Bloomberg did a nice (and short) piece about the politics of the reappointment and the need for the Federal Reserve Chariman to go visiting with the politicians to keep his job.

- JSM

Bankers Without a Clue?

Paul Krugman wrote a nice op ed piece in today's New York Times titled Bankers Without a Clue. Krugman observes disappointingly that the bankers just don't get it. In truth, comments like the financial crisis was just a perfect storm (Goldman Sachs’s Lloyd Blankfein) and that no one could have predicted its coming (Jamie Dimon of JPMorgan Chase & Co.) are pretty unbelievable. I hope that the executives of these large financial insitutions aren't and weren't really that clueless. That said, I agree with Krugman that I don't expect the banks to give much concrete advice on financial reform. The distrust the banks have of regulators (and desire to protect their own pocketbooks) has resulted in many of the banks repaying the TARP funds as soon as possible.

Bill Thomas who is Vice Chairman of the Financial Crisis Inquiry Commission has assured us that at least the questions will be asked. Question is, whether any meaningful financial overhaul will come from this?

-jsm