Burden of Bank Foreclosed Homes Rose in North Carolina

by Donald Hanz on Foreclosures

The cost of bank foreclosed homes owned by banking institutions in the Triangle region of North Carolina jumped by more than 300% during the whole year of 2009. Statistics for 2009 were released recently showing that the Triangle region figures are several times higher than those recorded by all banks in the state.

The value of bank owned homes for sale, foreclosed multi-family and single houses, commercial real properties and land developments increase to almost $400 million in 2009 from almost $90 million the year before. These properties practically transformed from cheap houses to high priced real estate in a single year.

According to 2009 statistics, not all of these structures are in the Triangle region, but they are part of the books of banks headquartered in the area. In the whole state of North Carolina, foreclosed homes included in the books of state-headquartered banks increased in value by more than 60% to $5.4 billion for the year of 2009 compared with the previous year.

The statistics were derived from data that banks themselves provided to the Federal Deposit Insurance Corp. and were presented through a study conducted by Forum Capital. The study also reported that foreclosed properties of banks in the state represented 40% of total foreclosures from several Southeastern states and more than 10% of nationwide bad debt seized properties.

More than 80% of bank foreclosed homes that accounted for the $5.4 billion amount was under the books of several big names in the region, including BB&T, Wachovia and Bank of America. BB&T owns 1.6 billion worth of bank owned homes for sale, while Wachovia accounted for $1.1 billion. Bank of America has $1.9 billion worth of foreclosed properties on its hands.

Some market analysts speculated that most banks are holding on to these structures in the hope that the housing market will eventually recover and they can then offer the properties for higher prices as bank owned homes for sale. However, the rule governing banks being allowed to have holding options largely depends on individual housing markets, banking officials have stated.

The value of bank foreclosed homes held by most Triangle region banks in North Carolina recorded a huge jump in 2009 compared with the year before. Real estate market observers are still unsure what banks are planning to do on the properties.

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