FDIC Plans to Sell $1 Billion of Bonds Tied to Real Estate

By
Real Estate Agent with Pacific Sun Capital - Commercial Bridge Loans & Investments

The Federal Deposit Insurance Corp.
plans to sell almost $1 billion of
securities tied to residential and
commercial real-estate debt once
held by failed banks, according to
a person familiar with the transaction.

Read more on this story from
Bloomberg here

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Comments (2)

Fred Griffin Tallahassee Real Estate
Fred Griffin Real Estate - Tallahassee, FL
Licensed Florida Real Estate Broker

This may put a nail in the coffin of any attempted "Principal Reduction" that was being promoted by various Politicians, Consumer Advocates and Trade Groups.

Any attempt to reduce the Value of the Mortgages and Financing that are behind Mortgage Backed Securities, including Bonds, would de-value said Bonds and Securities.  There will be no "Principal Reduction".

Dec 17, 2010 09:55 AM
Joe Kelly
Pacific Sun Capital - Commercial Bridge Loans & Investments - Houston, TX
Bridge Loan Financing - Commercial Hard Money Loans

FDIC is definitely in a spot. Further deleveraging such as the discounted bulk sale of said securities is likely which tightens the noose on the same banks FDIC is trying to help or atleast trying to avoid shutting down. It's a slippery slope and a deflationary impact seems inevitable even if Bernanke did drop cash from a copter.

Dec 21, 2010 07:02 AM