FDIC 'to sell $1.1bn worth of seized property loans'

1 October 2010

The Federal Deposit Insurance Corp (FDIC) is looking to sell off around $1.12 billion of property loans seized from failed banks.

According to data collected by Bloomberg ahead of an official announcement, the planned sales are made up of $351 million worth of commercial property loans, with the other $773 million related to residential home debts.

The amount of debt held by the FDIC is partly down to the collapse of 127 US banks in 2010, many of which were pushed to the wall by bad loans impairing their capital levels.

Bids for the lots are due on November 16th 2010, with potential buyers required to meet a series of qualification requirements, including the provision of $250,000 as a due diligence deposit.

Earlier this year, the Dodd-Frank Act gave the FDIC the power to liquidate any financial institution which is deemed to be failing and causing a risk to the economic stability of the US.

By Asim Shah

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