There have been 17 bank failures in IL. Second only to Georgia. WTF is that about?

[stevebreeze]

Has anyone seen any mention of this in local news? The latest was First DuPage in Westmont. This is not where one would expect to see a lot of sub prime loans. It is just curious to me.

[Hassin Bin Sober]

1. These banks re getting killed with commercial loans.

Except for the large thrifts that dabbled in sub-prime, I'm going to hazard a somewhat educated guess (I'm a mortgage banker) that most if not all the sub-prime lenders are already kaput. Have been for over a year.

A small bank like First Du Page may have service a sub-prime customer by brokering the loan but they would never carry the paper and take the risk. The same goes for 30 year "conventional" money. They may originate and service the loan but your best deals come from conventional "sale-able" loans to fannie and freddie. They sell the note to replenish their funds and not tie up their depositors money for thirty years. They may or may not keep or sell the servicing piece taht YOU see when you are a customer.

Commercial loans (and home equity loans and car loans) are another story. The locals like to "portfolio" those loans but they are typically shorter term ARMs and balloon products.

[stevebreeze]

2. my question was not so much about DuPage, but IL in general

first I agree with your thoughts on the major sub prime lenders.
Are you suggesting that commercial real estate is the problem leading to so many IL bank failures?

[Hassin Bin Sober]

3. Yes commercial. Keep in mind that also includes loans to developers ...

.. for commercial properties AND residential projects.

[Kittycat]

4. All I know is that a mortgage company just bounced a 747K check to my county

that was intended to cover Escrowed Property Taxes. Some of the banks that took over those accounts are working with the county, but BofA is stalling. And of course those homeowners are still responsible for coming up with those tax payments, even though they thought they were secure in an Escrow acct. Nice, huh?