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.
Showing posts with label occ. Show all posts
Showing posts with label occ. Show all posts
Wednesday, May 20, 2009
Sunday, May 3, 2009
US Bank Failure Losses Top $5 Billion In 2009
Federal regulators shut three more institutions on May 1, increasing the total estimated losses related to failed bank in 2009 to more than $5 billion, according to a report by Condo Vultures® LLC.
In 2008, regulators shut 25 institutions that resulted in total losses of between $10.4 billion and $14.9 billion, according to the report based on data from the Federal Deposit Insurance Corp.
"Our research indicates that taxpayers have lost an estimated $5.3 billion this year," said Peter Zalewski, a principal with the Bal Harbour, Fla.-based consultancy Condo Vultures®. "This means that taxpayers are losing about $1.33 billion per month or $11 million per day due to bank failures. Based on this pace, it is not difficult to envision losses in 2009 at least equaling those of 2008, which would put us in a range of $30 billion of bank failures in two years."
In the most recent seizures, regulators closed Silverton Bank in Georgia with assets of $4.1 billion, America West Bank in Utah with assets of $299.4 million, and Citizens Community Bank in New Jersey with assets of $45.1 million.
The trio of bank failures increases the total number of failed institutions to 32 in the first four months of 2009, according to Condo Vultures®.
In the first quarter of 2009, regulators shut 21 institutions with combined assets of $9.6 billion and deposits of $7.9 billion.
The estimated losses incurred with the first quarter closures are at least $2.3 billion, according to the report.
In the first month of the second quarter, regulators have already closed 11 institutions with combined assets of $9.7 billion and deposits of $7.6 billion.
Losses associated with these bank failures are estimated at $3 billion, according to the report.
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
In 2008, regulators shut 25 institutions that resulted in total losses of between $10.4 billion and $14.9 billion, according to the report based on data from the Federal Deposit Insurance Corp.
"Our research indicates that taxpayers have lost an estimated $5.3 billion this year," said Peter Zalewski, a principal with the Bal Harbour, Fla.-based consultancy Condo Vultures®. "This means that taxpayers are losing about $1.33 billion per month or $11 million per day due to bank failures. Based on this pace, it is not difficult to envision losses in 2009 at least equaling those of 2008, which would put us in a range of $30 billion of bank failures in two years."
In the most recent seizures, regulators closed Silverton Bank in Georgia with assets of $4.1 billion, America West Bank in Utah with assets of $299.4 million, and Citizens Community Bank in New Jersey with assets of $45.1 million.
The trio of bank failures increases the total number of failed institutions to 32 in the first four months of 2009, according to Condo Vultures®.
In the first quarter of 2009, regulators shut 21 institutions with combined assets of $9.6 billion and deposits of $7.9 billion.
The estimated losses incurred with the first quarter closures are at least $2.3 billion, according to the report.
In the first month of the second quarter, regulators have already closed 11 institutions with combined assets of $9.7 billion and deposits of $7.6 billion.
Losses associated with these bank failures are estimated at $3 billion, according to the report.
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
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