Real Estate News and Tips

Overdue Real Estate Loans Continue to Plague Banks

BUILDER Online |

In Brief...

Nearly one out of every six dollars that banks currently have out in construction and development loans--16.63%--are at least 90 days past due as of Sept. 30, and another 2.23% are 30 to 90 days in arrears, according to the latest Federal Deposit Insurance Corp. (FDIC) Quarterly Banking Profile released Nov. 23.. So far this year, banks have charged off 5.28% of their construction and development loans outstanding, according to the FDIC's latest quarterly report of banking conditions. In contrast, the value of construction and development-related real estate of which banks have taken ownership has risen from $18 billion as of June 30 to $18.45 billion as of Sept. 30.. The number of banks that the FDIC has put on its list of problem institutions rose by 31 from the second quarter to total of 860 as of Sept. 30. For example, FDIC-insured institutions with fewer than $100 million in assets have labeled just 10.33% of their real estate construction and development loans as being more than 90 days overdue, while banks with more than $10 billion in assets had 18.03% of their construction and development loans noncurrent..

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