If you missed the Commercial Real Estate Notes Q&A Webinar yesterday you can get a replay here right now.
The upshot of that exercise is that the speaker and I are going to do a series of calls answering more of these types of questions.
One of the topics that we spent a bit of time on yesterday was loans covered under loss sharing agreements.
Loss share agreements are entered into between a bank that is acquiring another failed institution and the FDIC. What happens is that, when a bank fails, a stronger, typically local or regional bank, will acquire most all of it’s assets. The new bank gets deposits, loans, REO, the works generally.
These banks failed for a reason of course and it typically has to do with loan quality. The acquiring bank agrees to take and resolve or liquidate all the troubled assets and the FDIC agrees to mitigate the losses.
In yesterday’s webinar our guest JD Crouse walked us through a couple of case study transactions, notes that he’s buying for his own account. One of which was a CRE note he just picked up out of a loss sharing agreement at a local Colorado bank. Which begs the question…
Which Banks Have Commercial Real Estate Loans In Loss Share Agreements?
Here’s a quick video to show you how to identify banks with assets covered by loss sharing agreements.