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WHO IS AMERICA'S NEWEST LAND BARON ???

By Kenneth Young

Services for Real Estate Pros with Uni International LLC

November 17, 2009 03:38 AM

Take a guess....

Chinese Investors? Wall Street Tycoons? Some European Firms? Nope, how about the FDIC !!!!

That's right, the FDIC has taken over 155 failed banks in the last three years. Seizing more than 5,000 homes, subdivisions, buildings, parcels, multi-family buildings and anything else that was forclosed on by when dealing with the failed banks.

According to what I've read, the backlog of property has an appraised value of $2 billion. Taxpayers will have to deal with this for many years to come.

One CEO of a bank told me the other day that he thought that 25% of the banks will fail in the next three years, there are 8,100+ banks, so you do the math.

We currently have a 1000 home loans that are non-performing right now from failed banks, financial firm, investment companies. Some are ripe for loan modifications, some are in the process of foreclosure, others are just sitting there, owner occupied, waiting to see what investor will take over....

Whatever happens with the economy, up or down this problem will stick with us for a long time.

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Ross Westerman

Kingwood, TX

Kenneth,

I read an article in the WSJ written by MICHAEL M. PHILLIPS this morning discussing this issue. Looks like this will be a long time working through.

Nov 17, 2009 03:58 AM

Kenneth Young

Uni International LLC - Virginia Beach, VA

Ross - You are correct, but I believe that the article was a bit short on the actual numbers. The FDIC is working as hard as it can to get the assets (loans) sold to investors. But it takes 3-6 months to get the loan sale together, (they have to scan each doc for every loan, then put it into a PDF file to download).

And remember the FDIC is not the cause of banks failing, their just the clean up crew that has to deal with the mess.

Nov 17, 2009 04:12 AM

Alexandria Virginia

Featuring Susan Craft, CRS, REALTOR® - McEnearney Associates - Alexandria, VA

Real Estate Editor

Wait till they start shutting down 20-50 banks a week. I still want to know what they are going to do with the junk property they have on their books at 10+ times more than it's worth. Just the Corus Banks deal will cost taxpayers billions and billions . . . but Sheila Bair wants us to think the FDIC pulled off a prize winning deal. They should have shut Corus down four years ago.

Nov 17, 2009 06:25 AM

Bonnie Vaughan

Scranton, PA

CNE SFR - Buyers/Sellers - Lackawanna & Surroundin

Kenneth, I've read that there is a backlog of bank owned property making its way to the market in dribs and drabs. They have a glut of inventory. I also heard today that one out of 185 mortgages are late by one payment or more. Those are not even in the system yet.

Nov 17, 2009 06:48 AM

Larry Brewer - Benchmark Realty llc

Benchmark Realty LLc - Nashville, TN

Kenneth - All of this will clear up if the economy would get better and jobs would get created. Unfortunately, our tax structure makes it cheaper to build products overseas and import them. No jobs wiith that strategy.

Nov 17, 2009 07:07 AM

Alexandria - The "junk" is already out there for someone to pick up. Right now, there is an "asset" sale on a building in Detroit, Mi. The loan balance is 16.5 million, BUT the building is only valued at 5.4 million at the most. Detroit has dozens of abandoned buildings right now, going for nothing.... so who's gong to buy this one at any price?

Bonnie - Yes it is slowly hitting the investor market. I have deals right now in PA. I think that the FDIC and Fannie Mae are letting properties go at a slow pace so as not to flood the market right now.

Larry - You are correct. China builds cheaper because they devalue their currency so it looks like it costs less to manufacture there, and costing less to buy here. Obama tried to talk to them about it over the last few days, they didn't budge... Small businesses here are where jobs are created. But with the credit crunch still with banks, small businesses can not expand.

Nov 17, 2009 01:42 PM

Trey Thurmond

BCR Realtors - College Station, TX

College Station , Texas Homes

Kenneth

The 25% estimate could easily happen in this world. I look at our area and none of the banks that were here in the 80's remain today!

Nov 18, 2009 04:30 AM

Jay-Paul Lowry

Riverside, CA

there was an article yesterday that loan delinquencies hit an all time high last quater and they have been rising for 11 straight months. yah things are so much better now.

Nov 18, 2009 07:49 AM

Trey - Only 7 banks closed in TX this year so far, BUT when Guaranty Bank in Austin, TX closed, I believe it was one of the largest to close. 103 Branches in TX and 59 Branches in CA. And yes, expect more to come from TX as well as everywhere else.

JP - Yes, loan delinquencies will continue for the next few years. And we will be selling them as fas as we can......

Nov 19, 2009 06:50 AM

Russel Ray, San Diego Business & Marketing Consultant & Photographer

Russel Ray - San Diego State University, CA

Texas had a lot of banks fail in the early 1980s when the Texas oil boom was going bust. Then California had a lot of banks fail in the early 1990s in the Savings & Loan fiasco. Now in the late 2000s. I'm detecting a pattern here.

Happy end of year!

Dec 14, 2009 12:21 PM

WHO IS AMERICA'S NEWEST LAND BARON ???

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