NEWSThu, Jun 10Commercial real estate slide impacting small and regional banksMany small and regional banks face serious financial crisis because of defaulting commercial real estate loans. According to the Federal Deposit Insurance Corp. (FDIC), since the beginning of the financial crisis, nearly 200 banks have gone under the majority of them smaller "community" banks. There are 700 more banks on the FDIC's confidential "Troubled Bank" list and of those, the number one reason for the bank being in trouble is an excessive concentration in commercial real estate lending. About half of these defaulting commercial real estate loans were held by these smaller banks with assets of between $100 million to $10 billion. Even worse is that commercial real estate loans make up a large percentage -- 33.4 percent -- of all the loans on their books. |
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