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What happens if/when the banks really have problems?
2 posts by 2 users
Todd M.Real Estate InvestorRenton, WA 
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I have one rental and am looking into the multi-family arena. One of my concerns about borrowing more money is all the news I hear about banks going through hard times and what the future may hold. I just heard that IndyMac borrowed 1/10th of the money in FDIC, and they aren't even one of the 90 that the FDIC is really worried about (still trying to verify all this). What could this mean for borrowers? Could we see the calling of loans as they had during the depression? Don't mean to sound so gloom and doom,
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Jon H.Real Estate InvestorDenver, Colorado 
 Moderator |
Have a look at this thread on banks calling loans. Unless you specifically agree to a callable clause in your loan, the bank can't call it. Do be more careful in the multi-family arena because commercial loans don't have the same restrictions as 1-4 unit RESPA loans. IndyMac didn't " borrow" money from FDIC. FDIC payed out claims to depositors when IndyMac folded. Note that the FDIC didn't pay the full amounts for depositors who were over the protection limits. Performing loans are assets. The assets of folding banks will be sold off to try to recover some of the funds the FDIC has to kick in. Haven't heard that 10% number. Do you have a reference for that? |
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Posted: 07/22/2008 at 07:06PM