Commercial Real Estate and the Big Banks
I've previously written a series of columns focusing on the largest categories of assets held by the banks: first and second trust residential mortgages, credit cards, and commercial and industrial loans. Today let's look at commercial mortgages and real estate at the large money centers. Tomorrow we'll look at commercial mortgages at the regional and local bank level.
The reason for separating the two is only about 5% of assets at the large money centers are in commercial real estate mortgages, whereas it's about 30% at regional and local banks. Bank-held commercial mortgages, at about $1 trillion, represent 9% of the value of all loans held by all banks. There are four important areas to consider for a picture of how the money centers are handling commercial real estate issues: loans outstanding, nonperforming loans, REO (real estate owned), and recovery rates. These represent the progression a loan and its collateral goes through once a default has occurred....328 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
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