Go Banking Rates

The numbers for the banking and financial sector's third quarter of 2009 are in, and they paint a very mixed and tentative picture of how the industry is faring and where it's headed. As unemployment continues its monthly rise (up to 9.8 percent in September, with 10 percent or more sure to follow) banks are faced with serious problems stemming from delinquent loans and credit. The resulting loan write-offs and infusions of capital into loan loss reserves are taking a serious toll on the banks' gross revenues, and ultimately lowering shareholders' stock dividends. Conversely, several banks are seeing their wealth management divisions turn healthy profits, which could be a harbinger of better economic times to come - or at least, be a sign that the worst of the recession is over.

One of the nation's biggest banks is the Bank of America. The Charlotte, North Carolina-based financial services titan reported losing $2.2 billion on bad loans in the third quarter, a rise of just under 50% from the previous quarter. Particularly bleak were the numbers from the global card services division, which totaled $1.6 billion, up from $167 million a year ago. Offsetting these losses, however, was the performance of Merrill Lynch, which BofA acquired in January. The wealth-management division reported a doubling of its profits from one year ago, and these positive numbers are giving many economists and investors desperately needed hope that the economy is on the verge of recovery. Interestingly, Bank of America's profit from overdraft fees - after imposing enormous hikes in the fee cost and number charged per day - seems to have been negated by the decision to roll them back.

Citigroup Inc., which had posted profits in the previous two fiscal quarters, posted third-quarter losses comparable to Bank of America's, losing $3.2 billion due to massive consumer debt write-offs. Like BofA and other big banks, Citigroup's investment services division did strong business - but not strong enough to offset credit card and home mortgage losses

One bank reported strong third-quarter earnings: JP Morgan Chase. Like BofA, JP Morgan saw its investment banking division do very healthy business which offset steep losses and write-offs in the credit card and home mortgage loan divisions. Morgan Chase's strong showing - a $3.6 billion Q3 profit - inspired a rally on Wall Street, sending shares up over 10,000 for the first time in a year.

Clearly, the financial sector is struggling to get out of the recession, with mixed signals suggesting the worst is over. With many economists agreeing that the recession is over, the big questions remaining are when profits will be back, and who will be able to survive the long march back to health.

According to the Mortgage Bankers Association (MBA), foreclosures continue to soar while mortgage modification programs set up to help homeowners in trouble struggle to keep up. Currently, several million homeowners are either in loan default or nearing foreclosure. And thanks to consistent layoffs, more problem mortgages are likely to find their way back in lenders' hands to manage in the coming months.

The Hope Now Alliance, a mortgage industry trade group, reported in August 2009 that there were 3.3 million homeowners 60 days or more late on their mortgage payments. The group runs a hotline for troubled homeowners and is said to receive upwards of 5,000 calls a day. But this only marks a portion of the homeowners that are really in trouble. Mortgage servicers have reported that only 50 percent of delinquent borrowers actually respond to offers of assistance.

Those who are asking for help, however, are flooding mortgage modification programs, leaving them with the fear that they won't be able to keep up. However, experts recommend requesting assistance no matter how busy mortgage modification programs may be.

Of course, it's good to understand the implications associated with a modification before diving in. For example, your credit score can take a 50- to 100-point hit with the modification, so if you only have a short-term financial issue, you might see if your lender can lower interest for a couple of months rather than permanently modify your loan.

The best approach to determine how you should manage your troubled home loan is to contact your lender, because the last thing you want is to add your name to the growing list of homeowners headed toward foreclosure.

Have you struggled with your mortgage payments? Did you seek the help of a mortgage loan modification program?

A lot can be learned from watching reality TV. Case in point: Jon and Kate from TLC's Jon and Kate Plus 8 and the financial mess that now exists as part of their very public split.

The young couple was once a united front in managing their complicated household filled with multiple children....

When you're expecting your first baby, you might not know about expenses associated with your baby's first few years of life. Get ready, because the cost of welcoming your new arrival can be substantial. Some estimates place the initial outlay at up to $32,000 for the first two years alone. Many...

Having a baby is a joyful experience, and one of the biggest life-changing events you will ever go through. But among the emotions that are washing over you as an expectant parent, you might also be experiencing some panic about the financial aspect of starting a family. How are you going to...

We've been getting a lot of questions about how debt repair really works. Sometimes, it can be tough to know exactly how to get out of debt, so we asked a company, Simplified Debt Solutions, to give us the 411.

Understanding Your Debt

Often times, we accumulate debt and have no idea how it...

As you prepare for your new baby, you'll need to look ahead over the next few years and understand what sort of costs are associated with your child at every age. Even by conservative estimates, the cost of raising a child for the first 17 years can be $9-10,000 per year. If you are adding...

There are too many stories floating around about foreclosures, excessive debt and financial failure. Adults who are struggling with finances now probably never received a proper education regarding financial responsibility and did not get help building the best credit possible.

It is never too...

President Obama plans to press Congress to provide $250 payments to 57 million seniors, veterans, and people with disabilities next year. The effort will likely cost $13 billion, but will help offset the cost-of-living increase that will be absent from Social Security checks at the beginning of...

Halloween has grown into a holiday that generates over $5 billion for retailers, venues, candy manufactures, liquor companies and the like. But with the economy still trying to stabilize, revelers are looking for ways to keep some more of that money in their high interest bearing savings...