Uncategorized March 15, 2023

Bank Failures…What Just Happened?

“I can assure you, my friends, that it is safer to keep your money in a reopened bank than it is to keep it under the mattress,” President Franklin D. Roosevelt told the U.S. public on March 12, 1933.

What just happened? Two banks failing and potentially more..? There is a lot to unpack but public confidence has always been key. And the FDIC (Federal Deposit Insurance Corp) was put in place to help keep consumer confidence up, and protect depositors when needed. In 1934 FDIC insurance was introduced at $2500 per depositor per institution, today it is at $250,000 per depositor per institution for money accounts (the FDIC does not cover investment instruments such as stocks). FDIC insurance is funded by a premium of 12 cents for every $100 deposited into the Bank Insured funds account.

How are home sales doing amongst all of this rate volatility? We are still in a low inventory market with an uptick in loan applications. All indications are that the housing market is strong, and prices remain fairly stable in our market.

And where are rates heading? Rates will remain cyclical and come down after they are done going up. Indicators are that rates will continue up this year, but, the bank failures will very likely have some impact to help bring them down by next.

While there is no crystal ball for the economy, one of the first things to keep in mind is the banks in question are smaller more focused banks. Silicon Valley Bank focused more on tech start-ups, and Signature Bank focused more on the Crypto market. The larger banks will not fail, are probably too big to fail – but may pull back on some of its lending programs to wait out the storm. A couple of keynotes on these failures is the president announced right away all depositors will be made whole even above the FDIC insurance of $250k and that this will not be taxpayer burden. The Federal Reserve announced they are rolling out a Bank Term Funding Program (BTFP) that is being put in place to safeguard institutions affected by the market instability of these failures. And this BTFP in essence will give banks a 1-year loan backed by the securities collateral on their own balance sheet. The collateral on their balance sheet will be valued at original par value (not market value which would have had a discounted value with today’s higher bond yields). So, can we assume the Federal Reserve knows they will be lowering rates (yields) in 1-year? My bet is there may be some good news for rates, but, of course probably after we see one or two more rate hikes this year as promised, perhaps they will not be as significant.

My message is if you are looking to buy a home it is a great day to get prequalified and discuss ways you can safeguard your rate and buying power.

Feel free to contact me to discuss the economy or how you might refinance or purchase your next home. There are a ton of programs out there to help.

Thank you!

Anissa Rooney

Mortgage Professional 

208-271-6143 – call or text




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Anissa Rooney