The FDIC is preparing to auction off a portfolio of loans it acquired from 19 failed bank takeovers.
According to a preliminary announcement regarding the sale, the portfolio consists primarily of residential real estate acquisition, development, and construction loans with unpaid principal balances totaling approximately $610 million.
About 80 percent of the loans are past due and classified as nonperforming – 78 percent are at least 90 days overdue, and 2 percent are between 30 and 90 days delinquent.
The majority of the loans were originated in 2007. All are from Colorado, California, Utah, Idaho, Nevada, Georgia, and Washington.
The bulk of the package comes from Greeley, Colorado’s New Frontier Bank, which was shut down last April – 187 loans totaling just over $220 million, of which 91 percent are at least 90 days past due.
Atlanta-based Silverton Bank, which was closed last May, is the second largest contributor. The portfolio includes 23 of its loans, with an aggregate unpaid balance of $85 million. Eight-one percent of these are 90-plus days delinquent.
One seriously delinquent loan from IndyMac Bank has also made its way into the portfolio, with an overdue balance of $48,000.
Mission Capital Advisors LLC is acting as financial advisor and marketing agent to the FDIC for the sale. The company is accepting bids on the portfolio through April 6.
The FDIC has amassed some $40 billion in assets as the receiver of collapsed banks. Since the beginning of 2009, 162 lenders have gone under, and 2010 is expected to be another year of elevated failures, with 702 banks’ names now on the FDIC’s so-called problem list.
Chris Whalen, managing director of Institutional Risk Analytics in Torrance, California, which specializes in credit and risk management, explained to Bloomberg News that the FDIC doesn’t like to manage assets and prefers to put them back into private hands as soon as possible. He says the planned sale is most likely a sign that the federal agency is trying to raise capital and limit its losses, not that the market for distressed mortgages is improving.
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