Bay National's investor loans
There's a ripple impact from real estate investors sitting on homes that won't sell. Bay National Bank is feeling it.
The Baltimore bank says it's "operating under formal oversight by federal regulators as it tries to recover from losses on bad mortgage loans," Andrea Walker reports today. Here's why:
Bank executives said its problems stem from the collapse of the real estate market. Most of the losses came on loans given to investors who were purchasing homes, many around the Inner Harbor, and renovating them to sell. Many of the investors weren't able to sell the houses as values dropped.
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Comments
If you assume that the term investor is being used for PR reasons as opposed to the more accurate terms like amateur and incompetent speculator... the outcome makes more sense and the resolution is easier to justify. Yet another example of the effect from those TV shows like "flip this house".
I doubt there are many (any?) genuine investors have been caught with their shorts down on these deals.
Posted by: MrRational | February 12, 2009 10:17 AM
Banks are wounded right now and unable to invest, the sooner they recover the better for the American people.
Posted by: Miami Beach homes | February 12, 2009 12:42 PM
According the Case-Schiller index, the Baltimore/DC region has one of the slowest deflation rates in the country. If a bank can't make it here, it ought to be put out of our misery.
Posted by: OSR | February 12, 2009 6:00 PM