Federal regulators are staffing up for next month's scheduled opening of what is poised to be a 500-person bank failure and asset sales office in Florida.
The Federal Deposit Insurance Corp, which insures individual accounts up to $250,000, plans to open a "temporary" east coast office on Jacksonville's south side of town in September.
"Throughout its history, the FDIC has used these offices to keep temporary asset resolution staff closer to the concentration of failed bank assets they oversee," according to an FDIC statement. "As the work diminishes, the temporary satellite offices are closed."
Industry watchers expect a surge of bank failures to occur in Florida in the upcoming months as the sunshine state is one of the hardest hit real estate markets yet only six of the 94 FDIC institutions to fail since January 2008 have been headquartered in Florida.
By comparison, neighboring Georgia leads the nation in bank failures with 21 seizures, or 22 percent of the overall total closings, since 2008, according to Condo Vultures® LLC research based on FDIC data.
The FDIC's satellite office is viewed by many industry watchers as further proof that a series of Florida bank failures is imminent in the upcoming months. The FDIC is not dispelling the speculation.
"You put the office as close to the bulk of your work," FDIC spokesman David Barr told CondoVultures.com.
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Peter Zalewski of Condo Vultures® can be reached at 800-750-0517 or by email at peter@condovultures.com. Don't forget to sign up for our weekly Market Intelligence Report™ for detailed condo reports. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™ or our Video Gallery. Interested in buying multiple units from developers or banks? Be sure to visit the Condo Vultures® Bulk Deals Database. Our new books, the Official Condo Buyers Guide to Miami™ and Miami's Great Condo Crash: A Chronicle of the Boom and Bust™ are now available. Want to see every foreclosure filed in South Florida since 2007? Check out our Foreclosure Database™.
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Showing posts with label federal reserve. Show all posts
Showing posts with label federal reserve. Show all posts
Friday, August 7, 2009
Wednesday, May 20, 2009
Concerns Surface For FDIC's Legacy Loan Program
BY JIM FREER
Special Correspondent
The Federal Deposit Insurance Corp. has set next month as the target date to launch its program where banks will sell pools of problem loans to partnerships of private investors and the U.S. Department of the Treasury.
The regulators hope that participating banks will be able to put more focus on lending, including money from loan sales, and spend less time and expense managing delinquent loans.
However, information from banking and real estate sources indicates that the long-awaited Legacy Loan Program might not get off to a fast start.
Some bankers are concerned that prices for many delinquent loans sold in the program might be lower than the discounted prices at which they are carrying them on their books.
Interest in the program appears stronger from investors, such as large institutional funds and Florida-based real estate developers, than from banks that have delinquent loans.
Several, most notably Wells Fargo predecessor Wachovia Corp., were active earlier this decade in making loans for building and renovating condominium projects in South Florida and other markets.
The chance for investors to put as little as seven percent down on some loans with partial FDIC guarantees is a main attraction, said Nina Gordon, a partner in the Boca Raton office of law firm Broad & Cassel.
“They think they could have access to some treasures buried in vaults,” Gordon said.
Those “treasures” would be loans for now-troubled condominium conversions or construction of condo complexes and apartment buildings that could become viable projects after the economy recovers.
Numerous banks with offices in South Florida have loans on those properties that are 90 days or more delinquent. Many have been restructuring loans by cutting monthly payments or interest rates. They have had hopes, now fading, that borrowers can catch up on payments and avoid foreclosures.
Read More
Jim Freer is a special correspondent for CondoVultures.com. He is a veteran banking reporter and a consultant to the finance industry in South Florida.
Special Correspondent
The Federal Deposit Insurance Corp. has set next month as the target date to launch its program where banks will sell pools of problem loans to partnerships of private investors and the U.S. Department of the Treasury.
The regulators hope that participating banks will be able to put more focus on lending, including money from loan sales, and spend less time and expense managing delinquent loans.
However, information from banking and real estate sources indicates that the long-awaited Legacy Loan Program might not get off to a fast start.
Some bankers are concerned that prices for many delinquent loans sold in the program might be lower than the discounted prices at which they are carrying them on their books.
Interest in the program appears stronger from investors, such as large institutional funds and Florida-based real estate developers, than from banks that have delinquent loans.
Several, most notably Wells Fargo predecessor Wachovia Corp., were active earlier this decade in making loans for building and renovating condominium projects in South Florida and other markets.
The chance for investors to put as little as seven percent down on some loans with partial FDIC guarantees is a main attraction, said Nina Gordon, a partner in the Boca Raton office of law firm Broad & Cassel.
“They think they could have access to some treasures buried in vaults,” Gordon said.
Those “treasures” would be loans for now-troubled condominium conversions or construction of condo complexes and apartment buildings that could become viable projects after the economy recovers.
Numerous banks with offices in South Florida have loans on those properties that are 90 days or more delinquent. Many have been restructuring loans by cutting monthly payments or interest rates. They have had hopes, now fading, that borrowers can catch up on payments and avoid foreclosures.
Read More
Jim Freer is a special correspondent for CondoVultures.com. He is a veteran banking reporter and a consultant to the finance industry in South Florida.
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