by Bill McBride on 2/01/2008 10:26:00 AM
Friday, February 01, 2008
From Bloomberg: Goldman Says Banks May Face $60 Billion in Writedowns
Commercial real estate prices may fall 21 percent to 26 percent from current levels, resulting in writedowns for banks of about $20 billion, Goldman Sachs said today in a report.We've moved way beyond subprime. The price declines for CRE will lead to more defaults (since owners can't refi), and this will impact many small and mid-sized lending institutions with high CRE loan concentrations.
Home price declines will probably drive defaults in non- traditional loans such as Alt-As, which often include limited or no income documentation, resulting in $40 billion in markdowns ...
It was just yesterday that the Comptroller of the Currency John C. Dugan expressed concern about CRE concentrations at community banks.
Posted by Bill McBride on 2/01/2008 10:26:00 AM