BY JIM FREER
CondoVultures.com
Federal regulators late Thursday afternoon seized Coral Gables-based BankUnited, FSB, the largest bank based in Florida, and sold it to a newly formed savings bank with the name, BankUnited.
BankUnited’s new ownership is a consortium of investors that includes John Kanas, a veteran New York banker who will head its operations beginning Friday, May 22, and New York-based investment firm WL Ross & Co. The investors are putting $900 million in capital into the bank.
Bank United, FSB, had $12.8 billion in assets and $8.6 billion in deposits as of May 2.
The bank had been suffering heavy losses, stemming mostly from its portfolio of “monthly option” adjustable rate mortgages. South Florida condominium units were prominent among its growing volume of non-current loans and foreclosures.
BankUnited had been under regulators’ orders to find a buyer or raise capital, and regulators had been directing those efforts since late last month. A change in control was widely expected by the end of this week.
The Federal Deposit Insurance Corp. said others in the investment consortium are: Carlyle Investment Management L.L.C.; Blackstone Capital Partners V L.P.; Centerbridge Capital Partners, L.P. LeFrak Organization, Inc; The Wellcome Trust; Greenaap Investments Ltd.; and East Rock Endowment Fund.
The WL Ross-led group was one of several groups that reportedly submitted bids for BankUnited.
BankUnited's 86 branch offices, all in Florida, will be open Friday during normal business hours. All deposits acquired by the new owners will be insured by the FDIC.
Customers can continue to use BankUnited, FSB's, checks, ATM cards and debit cards. Checks drawn on the bank will continue to be processed. Loan customers should continue to make their payments as usual.
On Thursday, The U.S. Office of Thrift Supervision (OTS) acquired the banking operations, including all the non-brokered deposits, of BankUnited in a transaction facilitated by the FDIC.
The FDIC, as receiver, then arranged the sale to the group led by Kanas and WL Ross.
Details of the regulators’ takeover are on the FDIC’s Web site.
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Showing posts with label florida. Show all posts
Showing posts with label florida. Show all posts
Friday, May 22, 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.
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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.
Saturday, May 16, 2009
Expert: Florida Housing To Bottom By Mid-2010
National real estate consultant Jack McCabe, one of the first analysts to predict South Florida’s housing bubble and bust, projects that the Florida housing market is within a year of hitting bottom.
McCabe, president and chief executive of McCabe Research & Consulting LLC in Deerfield Beach, Fla., estimates residential values are within 15 percent of their lowest levels, and he expects the remaining price drop to occur in the next four quarters.
“I think 2009 is going to be the toughest year of this downturn for the state of Florida,” McCabe said in an exclusive video interview with CondoVultures.com. “I really see next year – about mid-2010 – that, I think, we are finally going to reach the bottom, or what everybody has been calling the bottom.”
The hour-long McCabe video interview where he discusses Florida’s past, present, and future with Peter Zalewski, a principal with the Bal Harbour, Fla.-based real estate consultancy Condo Vultures®, is available in its entirety in the White Papers section of CondoVultures.com.McCabe disagrees with some on Wall Street that Florida residential pricing will still fall an additional 35 percent in the upcoming months.
“I don’t think it is going to be that severe,” McCabe said. “I think the worst is behind us, but I still believe we have another 10 to 15 percent drop because of the unemployment and the foreclosures depressing prices, and the amount of inventory we have yet to absorb.”
The bottom may be within McCabe’s sight but he doesn’t expect Florida prices to appreciate in the foreseeable future.
“I don’t think it is going to be a V-shape recovery,” McCabe said. “I think this is going to be more like an L shape [recovery]. We are going to see prices remain along that bottom potentially into 2012 before we see any type of appreciation at all. “When we do, it is going to be more in line with historical trends of about six percent [appreciation] a year. We have a ways to go yet.”
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™. 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™.
Copyright © 2009, Condo Vultures® LLC
McCabe, president and chief executive of McCabe Research & Consulting LLC in Deerfield Beach, Fla., estimates residential values are within 15 percent of their lowest levels, and he expects the remaining price drop to occur in the next four quarters.
“I think 2009 is going to be the toughest year of this downturn for the state of Florida,” McCabe said in an exclusive video interview with CondoVultures.com. “I really see next year – about mid-2010 – that, I think, we are finally going to reach the bottom, or what everybody has been calling the bottom.”
The hour-long McCabe video interview where he discusses Florida’s past, present, and future with Peter Zalewski, a principal with the Bal Harbour, Fla.-based real estate consultancy Condo Vultures®, is available in its entirety in the White Papers section of CondoVultures.com.McCabe disagrees with some on Wall Street that Florida residential pricing will still fall an additional 35 percent in the upcoming months.
“I don’t think it is going to be that severe,” McCabe said. “I think the worst is behind us, but I still believe we have another 10 to 15 percent drop because of the unemployment and the foreclosures depressing prices, and the amount of inventory we have yet to absorb.”
The bottom may be within McCabe’s sight but he doesn’t expect Florida prices to appreciate in the foreseeable future.
“I don’t think it is going to be a V-shape recovery,” McCabe said. “I think this is going to be more like an L shape [recovery]. We are going to see prices remain along that bottom potentially into 2012 before we see any type of appreciation at all. “When we do, it is going to be more in line with historical trends of about six percent [appreciation] a year. We have a ways to go yet.”
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™. 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™.
Copyright © 2009, Condo Vultures® LLC
Sunday, May 10, 2009
Florida Bank Failures Foreshadowed By FDIC
Federal regulators are staffing up, leasing office space, and creating a management structure in preparation to seize an undisclosed number of struggling banks in Florida and the Southeastern United States.
The Federal Deposit Insurance Corp., which guarantees deposits of $250,000 at the nation's banks, plans to open a satellite office to be used by up to 500 people in the northeast Florida city of Jacksonville to spearhead the imminent seizures and eventual asset sales.
"The FDIC, which prides itself on predictability and consistency, is sending a strong message to the banking industry that the day of reckoning is almost at hand," said Peter Zalewski, a principal with the Bal Harbour, Fla.-based consultancy Condo Vultures® LLC. "Industry watchers have been expecting this moment as Florida - considered by many to be the epicenter of the U.S. housing crash - has had few bank failures to date."
Regulators have shut 57 banks since January 2008 with an estimated loss to the FDIC of $15.5 billion. Only four of the failed banks were headquartered in Florida - none in South Florida - compared to 11 seizures in Georgia and nine in California. A Florida credit unit has also closed by regulators.
The FDIC's bank seizure and asset sales office is scheduled to open in September with a combination of employees and subcontractors to oversee the process.
"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."
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™. 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™.
Copyright © 2009, Condo Vultures® LLC
The Federal Deposit Insurance Corp., which guarantees deposits of $250,000 at the nation's banks, plans to open a satellite office to be used by up to 500 people in the northeast Florida city of Jacksonville to spearhead the imminent seizures and eventual asset sales.
"The FDIC, which prides itself on predictability and consistency, is sending a strong message to the banking industry that the day of reckoning is almost at hand," said Peter Zalewski, a principal with the Bal Harbour, Fla.-based consultancy Condo Vultures® LLC. "Industry watchers have been expecting this moment as Florida - considered by many to be the epicenter of the U.S. housing crash - has had few bank failures to date."
Regulators have shut 57 banks since January 2008 with an estimated loss to the FDIC of $15.5 billion. Only four of the failed banks were headquartered in Florida - none in South Florida - compared to 11 seizures in Georgia and nine in California. A Florida credit unit has also closed by regulators.
The FDIC's bank seizure and asset sales office is scheduled to open in September with a combination of employees and subcontractors to oversee the process.
"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."
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™. 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™.
Copyright © 2009, Condo Vultures® LLC
Friday, April 17, 2009
South Florida REOs Jump 54% In Q1 2009
Banks repossessed through foreclosure more than 7,300 properties in the tri-county South Florida region in the first three months of 2009, representing a 54 percent increase over the number of properties taken back in 2008, according to a new report from Condo Vultures® LLC.
Lenders took ownership of a combined 2,355 properties in January, 2,432 properties in February, and 2,524 properties in March in Miami-Dade, Broward, and Palm Beach counties. At this pace, more than 29,000 properties would be repossessed in South Florida in 2009, according to the Condo Vultures® report.
"We actually expect the number of REOs to far surpass 30,000 in 2009," said Peter Zalewski, a principal with the Bal Harbour, Fla.-based real estate consultancy Condo Vultures®. "Now that the government and lenders appear to be poised to allow many of the holiday-inspired foreclosure moratoriums to expire, we anticipate an uptick in the number of Lis Pendens and/or Notices of Default filings in the upcoming months."
Surprisingly, Miami-Dade County, considered by many to be the hardest hit real estate market in South Florida, no longer holds the distinction of having the most bank-owned properties in the tri-county region.
Broward County, where Fort Lauderdale, Hollywood, and Pompano Beach are located, wrestled away that distinction from Miami-Dade in 2009 with a 100 percent increase in REOs.
In the first 90 days of 2009, lenders took back 3,341 properties in Broward compared to 2,691 properties in Miami-Dade. In Palm Beach, lenders repossessed 1,279 properties.
By comparison, in the first quarter of 2008 lenders repossessed 2,395 properties in Miami-Dade, 1,671 properties in Broward, and 696 properties in Palm Beach, according to the report.
To repossess a property in South Florida, lenders must first file a Lis Pendens and/or Notice of Default with the circuit court in the county where the residence is located.
The filing initiates what is typically a six to nine month process that costs a lender an estimated $40,000 to $80,000.
The final step of the foreclosure process is a courthouse auction where a lender's financing position is available for purchase by the highest bidder based on a minimum judgment amount set by the court.
Many bidders often times fail to purchase a lender's financing position on a condo, townhouse, or single-family house as the debt owed on the foreclosed property by the borrower far exceeds the amount an investor would be willing to pay in today's distressed market.
It is at this point in the foreclosure process that the court formally transfers a property from the borrower to the lender, creating Real Estate Owned (REO) by a bank.
Once in control of a property, a bank settles all outstanding title issues including past-due condominium maintenance fees before ultimately selling off the REO property at a deep discount.
"REOs offer some of the deepest discounts available in the volatile South Florida real estate market," Zalewski said. "The drawback is, many of these properties are in need of work, whether it is renovating a residence damaged by a frustrated borrower or building out a never-lived-in condo unit. Still, the potential upside is great for those buyers who are willing to put in some sweat equity."
Condo Vultures® Featured On CNBC's Squawk On The Street
CNBC's popular Steals and Deals segment featured Condo Vultures® on April 15 during the financial news network's Squawk On The Street program. The Steals and Deals segment focused on bank-owned condo units in Greater Miami that are now available at discounts as deep as 81 percent.
Miami Condo Trends Subject of Upcoming Seminar
Condo Vultures® is relaunching its seminar series on Tuesday, April 28, at the Doubletree Grand Hotel in Miami with a presentation by real estate consultant and broker Peter Zalewski. The agenda will include a discussion of proprietary research collected by Condo Vultures® regarding the South Florida condo market and the official launch of the firm's recently published eBooks, the the Official Condo Buyers Guide to Miami™ and Miami's Great Condo Crash: A Chronicle of the Boom and Bust™. For more information about attending, please visit the Upcoming Events section of CondoVultures.com.
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™. 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™.
Copyright © 2009, Condo Vultures® LLC
Lenders took ownership of a combined 2,355 properties in January, 2,432 properties in February, and 2,524 properties in March in Miami-Dade, Broward, and Palm Beach counties. At this pace, more than 29,000 properties would be repossessed in South Florida in 2009, according to the Condo Vultures® report.
"We actually expect the number of REOs to far surpass 30,000 in 2009," said Peter Zalewski, a principal with the Bal Harbour, Fla.-based real estate consultancy Condo Vultures®. "Now that the government and lenders appear to be poised to allow many of the holiday-inspired foreclosure moratoriums to expire, we anticipate an uptick in the number of Lis Pendens and/or Notices of Default filings in the upcoming months."
Surprisingly, Miami-Dade County, considered by many to be the hardest hit real estate market in South Florida, no longer holds the distinction of having the most bank-owned properties in the tri-county region.
Broward County, where Fort Lauderdale, Hollywood, and Pompano Beach are located, wrestled away that distinction from Miami-Dade in 2009 with a 100 percent increase in REOs.
In the first 90 days of 2009, lenders took back 3,341 properties in Broward compared to 2,691 properties in Miami-Dade. In Palm Beach, lenders repossessed 1,279 properties.
By comparison, in the first quarter of 2008 lenders repossessed 2,395 properties in Miami-Dade, 1,671 properties in Broward, and 696 properties in Palm Beach, according to the report.
To repossess a property in South Florida, lenders must first file a Lis Pendens and/or Notice of Default with the circuit court in the county where the residence is located.
The filing initiates what is typically a six to nine month process that costs a lender an estimated $40,000 to $80,000.
The final step of the foreclosure process is a courthouse auction where a lender's financing position is available for purchase by the highest bidder based on a minimum judgment amount set by the court.
Many bidders often times fail to purchase a lender's financing position on a condo, townhouse, or single-family house as the debt owed on the foreclosed property by the borrower far exceeds the amount an investor would be willing to pay in today's distressed market.
It is at this point in the foreclosure process that the court formally transfers a property from the borrower to the lender, creating Real Estate Owned (REO) by a bank.
Once in control of a property, a bank settles all outstanding title issues including past-due condominium maintenance fees before ultimately selling off the REO property at a deep discount.
"REOs offer some of the deepest discounts available in the volatile South Florida real estate market," Zalewski said. "The drawback is, many of these properties are in need of work, whether it is renovating a residence damaged by a frustrated borrower or building out a never-lived-in condo unit. Still, the potential upside is great for those buyers who are willing to put in some sweat equity."
Condo Vultures® Featured On CNBC's Squawk On The Street
CNBC's popular Steals and Deals segment featured Condo Vultures® on April 15 during the financial news network's Squawk On The Street program. The Steals and Deals segment focused on bank-owned condo units in Greater Miami that are now available at discounts as deep as 81 percent.
Miami Condo Trends Subject of Upcoming Seminar
Condo Vultures® is relaunching its seminar series on Tuesday, April 28, at the Doubletree Grand Hotel in Miami with a presentation by real estate consultant and broker Peter Zalewski. The agenda will include a discussion of proprietary research collected by Condo Vultures® regarding the South Florida condo market and the official launch of the firm's recently published eBooks, the the Official Condo Buyers Guide to Miami™ and Miami's Great Condo Crash: A Chronicle of the Boom and Bust™. For more information about attending, please visit the Upcoming Events section of CondoVultures.com.
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™. 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™.
Copyright © 2009, Condo Vultures® LLC
Saturday, February 14, 2009
Banks From Florida, 3 Other States Fail At Cost Of $341 Million
Regulators seized four banks with combined assets of $1.01 billion and deposits of $808 million in Florida, Illinois, Nebraska, and Oregon on Friday, Feb. 13, in moves that will generate estimated losses of $341 million for the Federal Deposit Insurance Corp.
This latest round of bank failures is comprised of Florida's Riverside Bank of the Gulf Coast with assets of $539 million and deposits of $424 million; Illinois' Corn Belt Bank and Trust Co. with assets of $272 million and deposits of $234 million; Oregon's Pinnacle Bank with assets of $73 million and deposits of $64 million; and Nebraska's Sherman County Bank with assets of $130 million and deposits of $85 million, according to the FDIC.
The seizures come a week after regulators shut three banks in California and Georgia with assets of $3.2 billion and deposits of $2.5 billion on Feb. 6 at an estimated cost to the FDIC of $452 million, according to a report from the Bal Harbour, Fla.-based consultancy Condo Vultures® LLC.
For the year, regulators have closed 13 institutions with combined assets of $6.7 billion and deposits of $5.6 billion. The failed banks have been located in nine states (California with three failures, Florida and Illinois each with two bank failures) are estimated to cost close to $1.6 billion, according to Condo Vultures®.
In 2008, regulators shut 25 institutions from 13 states with combined assets of $374 billion and deposits of $234 billion. The estimated losses of the 2008 bank failures is between $10.4 billion and $14.9 billion, according to the report.
Peter Zalewski is a principal with the consulting company Condo Vultures® LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter’s blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™ .
Copyright © 2009, Condo Vultures® LLC
This latest round of bank failures is comprised of Florida's Riverside Bank of the Gulf Coast with assets of $539 million and deposits of $424 million; Illinois' Corn Belt Bank and Trust Co. with assets of $272 million and deposits of $234 million; Oregon's Pinnacle Bank with assets of $73 million and deposits of $64 million; and Nebraska's Sherman County Bank with assets of $130 million and deposits of $85 million, according to the FDIC.
The seizures come a week after regulators shut three banks in California and Georgia with assets of $3.2 billion and deposits of $2.5 billion on Feb. 6 at an estimated cost to the FDIC of $452 million, according to a report from the Bal Harbour, Fla.-based consultancy Condo Vultures® LLC.
For the year, regulators have closed 13 institutions with combined assets of $6.7 billion and deposits of $5.6 billion. The failed banks have been located in nine states (California with three failures, Florida and Illinois each with two bank failures) are estimated to cost close to $1.6 billion, according to Condo Vultures®.
In 2008, regulators shut 25 institutions from 13 states with combined assets of $374 billion and deposits of $234 billion. The estimated losses of the 2008 bank failures is between $10.4 billion and $14.9 billion, according to the report.
Peter Zalewski is a principal with the consulting company Condo Vultures® LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter’s blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™ .
Copyright © 2009, Condo Vultures® LLC
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