Late Loans Soar on Troubled Mortgages
August 23rd, 2007Via: Yahoo / Reuters:
The Federal Deposit Insurance Corporation said on Wednesday delinquent loans at U.S. banks jumped 36 percent to $66.9 billion in the second quarter, the biggest quarterly increase since 1990, largely fueled by unpaid real estate loans.
Rising U.S. home foreclosures and problems in the subprime mortgage market have spilled into broader financial markets in recent weeks.
In a sign of the distress borrowers are facing, U.S. banks’ delinquent or noncurrent loans hit $66.9 billion at the end of the second quarter, up 36 percent from a year ago and up 10.6 percent from the end of the first quarter, the FDIC said.
The rise was the largest quarterly jump since the fourth quarter of 1990, the agency said. The second-quarter figure also represented the largest 12-month increase since 1991.
Noncurrent loans are those for which payments are overdue by at least 90 days.
“We remain vigilant,” FDIC Chairman Sheila Bair told a news conference on the data. “We are closely monitoring the situation in the markets as well as individual institutions.”
And now the people are starting class-action lawsuits. Few times in my short life have I seen the “snowball effect” actually run its course.