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Seattle Bubble Forum Archive • View topic - Homestreet Bank

Homestreet Bank

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Homestreet Bank

Postby Pndscm » Mon May 18, 2009 10:06 am

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Re: Homestreet Bank

Postby Dave0 » Mon May 18, 2009 12:08 pm

I switched from WaMu to BECU back in 2007 because BECU paid me better interest rates on checking (7.5% compared to 0%) and I never looked back. BECU is currently in good financial condition and is the second largest financial institution still standing in Washington State in terms of total assets (behind Sterling Savings Bank). I'm waiting for the day when Sterling Savings fails and BECU, a non-profit, is left standing where all of the for-profit banks failed. Now that would be ironic.
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Re: Homestreet Bank

Postby perfectfire » Mon May 18, 2009 12:13 pm

Remember, if you rent it's not a home, it's a hovel.
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Re: Homestreet Bank

Postby Pndscm » Mon May 18, 2009 12:41 pm

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Re: Homestreet Bank

Postby Pndscm » Mon May 18, 2009 12:44 pm

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Re: Homestreet Bank

Postby Dave0 » Mon May 18, 2009 1:22 pm

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Re: Homestreet Bank

Postby Angie » Mon May 18, 2009 4:31 pm

BECU isn't the only CU that offers that deal (higher interest on the first $500 in checking and first $500 in savings). Watermark does as well.

Strings are attached (as is the case with Verity, too). For BECU and Watermark, you need to have one automatic electronic deposit every month and one electronic billpay every month. This is not hard to set up automatically. For instance, my Qwest bill is ca. $60 every month--every month on the 10th $60 is electronically transferred from my main checking to BECU, and every 15th I pay my phone bill through BECU billpay.

Kids' accounts also get the favorable treatment for the first $500 in savings and of course they don't need to do electronic banking.

With BECU and Watermark, and with accounts for me, my husband, and my kids, we've got several thousand dollars of our nest egg pulling in >6%.
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Re: Homestreet Bank

Postby TJ_98370 » Mon May 18, 2009 5:26 pm

.
Pndscm,
.
Be advised, I received similar info about Westsound bank and about a month later it was shut down. It was taken over by Kitsap Bank. I was a bit surprised at how quickly it happened. No problems accessing my funds so far.
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Re: Homestreet Bank

Postby explorer » Mon May 18, 2009 10:21 pm

HomeStreet avoided subprime lending and today is one of the leading home lenders in the Pacific Northwest. The bank originated $1 billion in home loans in the first four months of 2009. HomeStreet is the number one Fannie Mae mortgage lender headquartered in Washington and Oregon, as well as one of the leading FHA and VA lenders.

I got the generic account holder letter from Homestreet, and although the PSBJ article seemed more detailed and specific, I am actually not that worried about this--famous last words notwithstanding. I also opened an account in response to the Big Banks BS a year ago.

Lot's of banks made construction loans that imploded when the feces hit the fan. Sterling Savings actually made more of them, to the point that they were told to take 300 million in TARP money when they did not ask for it. The key here is how much they held in reserve to cover their commercial construction loan defaults. Sterling Savings was actually more overextended in that area than Homestreet. The Homestreet numbers reported were not that badly out of balance.

I note that Sterling Savings also did not get into subprimes or dervitives. They sure hit the HELOC's hard though.

I don't have all my eggs in one basket either. I have had an account at Group Health CU for years, and you cannot beat their car loan rates. Service at most CU's is not as good, but they are all basically no-frills operations. They do serve their purposes well, and the major banks should also have a 15% max. limit on loan/credit card interest rates, IMO.
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Re: Homestreet Bank

Postby Dave0 » Tue May 19, 2009 7:59 am

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Re: Homestreet Bank

Postby Pndscm » Tue May 19, 2009 10:10 am

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Re: Homestreet Bank

Postby S-Crow » Tue May 19, 2009 4:33 pm

People continue to say these local banks did not do subprime. OK that's true. But what I continually don't understand is how the local banks credit officers and other VP's had no clue about what type of lending was buying up their builder-developers inventory. I mean, come on, these bankers are tied in heavily with understanding and following the markets and finance. It should have been a significant Tug-Boat-type-whistle-blow in their ear that something really nasty was coming down the road. Some of these banking suits continue to argue the "economy" as a primary trigger to having their loan portfolio go sideways. No, it was very bad lending that started the 1st domino.

I suppose they would argue in the same manner the sub-prime lenders did: if they didn't lend or compete with similar loan products they would get trampled in the markets.

Likewise the local banks would probably say that if they didn't compete for developer and builder business with the likes of Banner, Sterling, CityBank, or others, they would lose significant market share. The fees some of these banks make on these development/builder loans are quite lucrative. As it turns out, the race for market share resulted in substantial losses for shareholders and placing their organizations in financial distress.
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Re: Homestreet Bank

Postby TJ_98370 » Sun May 24, 2009 9:35 am

.
A response to S-Crow's post and a sad story that I fear may be repeated many times throughout the country -



......"The lessons learned are that any time an institution begins to emphasize growth and share price before loan administration and solid underwriting, you have a recipe for trouble," said Brad Williamson, Washington Department of Financial Institutions' director of banks. "And sadly, that appears to be what happened with Westsound Bank."......
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.....Golombek, the bank's first president and chief executive officer, left just 19 months (after he initiated the creation of Westsound Bank in 1998).
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The majority of the board wanted the bank to grow very fast, Golombek said recently. He preferred slow and steady.
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"I couldn't control them," he said. "I can sit there 'til I'm blue in the face and say, 'This isn't going to work.'".....
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.....Dave Johnson was hired to replace Golombek, and the coming years seemed great for Westsound and its customers......
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.....With home-appreciation rates rising 20 percent year after year, there seemed no end to the party. Westsound became a go-to bank for many local contractors like Becker. Many were overextended, but they were confident the economy would continue strong.
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"They would loan money to anybody," Becker said. Becker's son-in-law, Matt Templeton, said he was able to get $1.3 million in loans from Westsound when he was only making $35,000 a year.
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Westsound was confident, too. Its assets and deposits grew rapidly.
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In 2006, Johnson announced record growth for the first half of the year. Assets increased 63 percent to $301 million. Loans were up 76 percent to $275 million. Deposits increased 62 percent to $274 million, and net income rose 84 percent to $2 million.
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Westsound moved up Pacific to bigger quarters and had offices throughout western Puget Sound and in Federal Way.
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To fuel even more growth, Westsound leaders decided to take the company public. The bank's parent, WSB Financial Group, raised $41 million through an initial offering of common stock. Some 2.6 million shares were sold for between $16.50 and $19 apiece.
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The push was on.
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Westsound Hits the Wall
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But the next year, the inflated housing market that Westsound was so dependent on began to crumble.
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That provided a dangerous backdrop for what was about to happen.
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In an internal review, Westsound cut 33 of 40-plus employees from its mortgage marketing arm and terminated Brett Green, executive vice president of sales and lending, saying at the time it was going to outsource loan marketing.
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Soon after, the bank announced it was under investigation by the Federal Deposit Insurance Corp. and the state Department of Financial Institutions for possible fraud and violation of banking rules.
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Front and center in the probe were 146 risky high-end home construction loans worth $90 million.
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The result from the FDIC and DFI investigation remains out of reach of the public.
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But this is known - In a conference call to investors, Johnson said the bank had issued loans that didn't require full documentation of income, but merely stated income. But a secondary-market program by Countrywide Financial Corp., to which these loans were sold, required full documentation.
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Borrowers were making interest payments, but the bank could not demonstrate their ability to pay over the long haul.
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Countrywide pulled its program, leaving Westsound without an exit strategy.
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Most of the problem loans were made by one or two employees who were by then no longer with the bank. Many were made out of Westsound's branch in Federal Way for fancy houses in King and Pierce counties.......
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Re: Homestreet Bank

Postby SeattleMoose » Mon May 25, 2009 12:02 pm

"where all of the for-profit banks failed. Now that would be ironic."

Gee, I wonder where all the "profits" went... :wink:
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Re: Homestreet Bank

Postby TJ_98370 » Sun May 31, 2009 6:19 pm

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I posted a link to this 60 Minutes feature once before awhile ago, but I think the story is becoming more relevant now as it becomes known that a number of small local banks are in trouble.
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Video and text -
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