Homebuyers Hit by Commercial Real Estate Slide
Maybe you've considered refinancing your mortgage with a loan from a smaller bank. Well the next time you go to visit, the sign on the bank window may say "closed." That's because many small and regional banks are under serious pressure from the growing troubles in commercial real estate.
Three more banks failed this week alone: TierOne Bank of Lincoln, Neb.; Arcola Homestead Savings Bank of Arcola, Ill.; and First National Bank of Rosedale, Miss. So far, close to 200 banks have gone under since the start of the financial crisis, nearly all of them smaller "community" banks, according to a list kept by the Federal Deposit Insurance Corp.
More than 700 more banks are on the FDIC's confidential "Troubled Bank" list, according to The Associated Press. That's close to one in 10 insured depository institutions, up from fewer than 50 troubled banks just a few years ago.
What's going on? Blame the commercial real estate market.