Floyd Norris’ Off The Charts column “Banks Out of the Woods? Maybe Not ” had some sobering news from the FDIC.
- $1 of $8 in outstanding 1-family mortgage loans is to a troubled borrower.
- 40% of 1-family residential construction loans delinquent or uncollectible.
- Number of outstanding loans falling, even after adjusting for write offs.
- 2.9% of loans written off in 2009, highest rate in FDIC history.
Some good news?
- Fewer loans are going bad – 30-89 day loan arrears falling
However this good news may be misleading – a regulatory change allows banks to only write down the exposure.