The Federal Deposit Insurance Corporation (FDIC) is frequently appointed as a receiver for failed banks. As of August 20, 2010, 310 banks have failed and have been taken over by the FDIC since October 1, 2000. (Source: FDIC Failed Bank List)
In 2009, the FDIC shut down 140 financial institutions. As of this writing, the FDIC has already taken over 118 lenders…on track to close down even more banks this year.
As of February 23, 2010, 702 banks…nearly one out of every 11…were on the “problem list” and at risk of going under, according to the FDIC. (Source: CNN Money) The “problem list” is not shared with the general public, as it might prompt depositors to “run on the bank”.
When a lending institution is informed they are on the “problem list”, insiders report that the lender is no longer allowed to originate loans…with eventual takeover a likely outcome.
When the FDIC takes over a bank, they also take over their distressed properties and notes. Liquidating the properties and notes has become a priority for the FDIC because the model they have been relying on has not been working well.
The mountain of commercial properties, bulk REO residential properties, and notes that the FDIC sits on can often be had at deeply discounted prices.
Based on mortgage reset projections, insiders estimate that this will be an opportunity for buyers for the next two to three years. Opportunity favors the swift.
NSN matches qualified buyers with institutional holders of distressed commercial and bulk residential real estate and notes.