“The storm surge of foreclosed properties on bank books shows little indication of ebbing, and institutions continue to be drowned by it.
Among the entities with the 25 highest percentages of repossessed assets (or “other real estate owned,” in industry parlance) to tangible equity at Sept. 30, about a third failed in October and November.
Their fate was presaged by outlandish ratios. At RiverBank in Wyoming, Minn., for instance, a nearly fourfold increase in foreclosed properties since the third quarter of 2008 – mostly collateral backing construction and development loans that went bad – combined with losses that drained tangible equity by about 99% over the same time to produce a ratio of OREO to tangible equity of about 7,000% at Sept. 30.”
I guess greed is not so good after all.
Full article here