Banks in distress: Foreclosure properties mount

Fri, Nov 27, 2009 (3 a.m.)

Problem loans and foreclosed properties are weighing on Las Vegas banks’ balance sheets, according to third-quarter filings released Nov. 24 by the Federal Deposit Insurance Corp.

As a whole, banks had a 39.7 percent increase in foreclosed properties since the quarter that ended June 30. Foreclosed properties were $218.5 million as of Sept. 30, up from $156.3 million June 30.

Loans that banks were no longer collecting on increased 16.8 percent to $1.36 billion as of Sept. 30 from $1.17 billion June 30.

The numbers don’t reflect large national banks, such as Wachovia or Citibank, who have headquarters in Southern Nevada, but don’t specify Las Vegas figures.

“Nevada banks continue to be distressed, but will continue to work through it,” Nevada Bankers Association CEO Bill Uffelman said.

Among the 34 commercial banks in Nevada, 79.4 percent are unprofitable as of Sept. 30, up from 57.9 percent the year before, a second FDIC report released Nov. 24 said. In September 2007, just 25 percent of commercial banks were considered unprofitable, the report said.

Net loss increased 113.2 percent, from $1.16 billion in September 2008 to $2.46 billion on Sept. 30. The drop in income is even more significant when compared with September 2007 with net income of $8.21 billion, the FDIC said.

Banks’ deposits increased 5.2 percent year over year, from $759.7 billion to $799.5 billion. The report shows that banks have regained ground lost in September 2008 and have returned to almost the level in September 2007, when banks reported $798.7 billion in deposits.

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By Rwolf

Nov. 28, 2009

8:39 a.m.

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House Democrats Won't Discuss The Economic Damage Forced Health Insurance Costs Will Cause the U.S. Real Estate Industry.

After the Health Care Bill passes, the annual costs of Forced Health Insurance will disqualify millions of home buyer mortgage applicants, needed to support selling prices and home values. It is foreseeable those costs will cause homebuyers to qualify for smaller mortgages. Obama appears unconcerned mandated health insurance costs will disqualify middle class home buyers that support the housing market, that secure trillions in mortgages held by U.S. banks. For many, health insurance costs may equal their paid Income Tax increasing the risks of mortgage default. Homeowners who can't afford health insurance or opt-out penalties, IRS can file liens destroying their credit; families deemed not poor by Government for subsidized insurance, may have to sell their homes or borrow money to buy health insurance or pay Opt-Out penalties with money needed for medical expenses.

Falling home prices and values continue to lower property taxes, forcing local governments to layoff workers and ask federal agencies for money; increasing federal deficits. Historically dropping home values cause unemployment in real estate industries, e.g. construction and manufacturing.
By mred

Nov. 29, 2009

11:21 a.m.

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You have people like Sean Insannity contend that the financial crisis is "because the CRA forced lenders to loan money to poor, minorities and illegal aliens" and that caused the housing market to collapse.

Does that explain why Lake Las Vegas and a number of upscale condo projects went BK?

Never underestimate the ability of racists to find scapegoats.