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CRE Loan Losses Subsiding? September 9, 2010

Posted by Sean Tufts in Articles, Research/Data.
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A new Costar report seems to suggest so:

The amount of loans and leases that were noncurrent (90 days or more past due or in nonaccrual status) declined by $19.6 billion (4.8%) during the second quarter. This is the first quarterly decline in noncurrent loans since first quarter 2006…  The largest reduction in noncurrent loans in the quarter occurred in real estate construction and development loans, where noncurrents fell by $5.9 billion (8.3%). This is the third consecutive quarter that noncurrent C&D loans have declined. Multifamily delinquencies also declined.

As bank profits return we can only hope that the reluctance to lend will subside:

Also, the banking industry’s quarterly earnings of $21.6 billion are up dramatically from the year-ago loss of $4.4 billion and represent the highest quarterly earnings since third quarter 2007… “This is the best quarterly profit for the banking sector in almost three years,” said FDIC chairman Sheila C. Bair

Full article here.

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