Bank Failures Jump to 52 in 2009

Real Estate Broker/Owner

According to writer Catherine Clifford, the number of failed banks in 2009 jumped to 52 as the FDIC took over seven more banks on Thursday.  The total cost to the FDIC has been $12.3 billion this year.  In 2008 there were a total of 25 bank failures at a cost of $17.6 billion, the article states.  In other words, we are on pace to see the number of bank failures quadruple year over year.

While the escalation of bank failures in 2009 has yet to reach the blistering pace that we saw in 1989 when there were over 500 due to the savings & loan fiasco, it may be pre-mature to start patting ourselves on the back yet.  With asset values plummeting and a fleet of commercial balloon loans coming due over the next couple of years, things are likely to get worse before they get better for the banking system.  

The answer is to stop the decline in asset values, both residential and commercial.  The solution to this crisis is coincidentally the same piece of legislation that was partly responsible for igniting the previous banking crisis, the Tax Reform Act of 1986.  

Comments (4)

John Mulkey - Waleska, GA
Housing Guru

Mark - But we feel really left out this time. None were from GA.

Jul 03, 2009 09:12 AM
Dan Quinn
The Eric Steart Group of Long & Foster Real Estate - Silver Spring, MD
Dan Quinn

Hope your wrong Mark.  Good luck on your book.

Jul 03, 2009 10:38 AM
Lou Ludwig
Ludwig & Associates - Boca Raton, FL
Designations Earned CRB, CRS, CIPS, GRI, SRES, TRC

Hi Mark

The numbers have been moving up all year.

Good luck and success.

Lou Ludwig

Jul 03, 2009 12:22 PM
George & Arlene Paukert
Road to Wealth, Inc. - West Palm Beach, FL

The worst part about this is if this continues to go this way, the government will tell us this is why we need to take control of the banks. The government should control the banks, but with Freddie and Fannie soon to be holding all the loans we sure are heading that way.

Jul 03, 2009 11:55 PM