News & Press

FDIC Sells Failed Bank Assets to Private Investor Group

WASHINGTON - The Federal Deposit Insurance Corp (FDIC) has concluded the sale of Real Estate Owned assets (REO) to the winning bidder under a the government's program to sell REO's from banks that FDIC has placed into receivership.

New York based Multi Distressed Asset Co. paid an unknown sum for a bulk purchase of assets from the FDIC which was taken back from numerous failed Banks nationwide.

The number of troubled banks rose to 552 at the end of September from 416 at the end of June and 305 at the end of March, the FDIC said in its third-quarter report. This is the largest number of banks on its "problem list" since the end of 1993.

"While bank and thrift earnings have improved, the effects of the recession continue to be reflected in their financial performance." said FDIC Chairwoman Sheila Bair.

The sale is part of the government's seemingly slow paced sales process in disposing of these assets to investors and local buyers. "It can take as long as 4-6 months to close a transaction that in the distressed REO world should take under 10 days" said Eli Verschleiser, CEO of Multi.

"In this segment of the market speed is of utmost importance. These assets are in a constant state of deterioration and 30 days can result in a home going from 50k to 10k." Pointing to the Taylor Bean Whitaker bankruptcy and its bulk REO sales transaction, Mr Verschleiser said "it amazes me that with all the professionals involved the courts did not order this transaction to occur in a much shorter time frame. Every day half of the assets go down in value and millions are being lost".

Taylor Bean filed for bankruptcy protection in late August after receiving notices from Freddie and fellow housing lender Ginnie Mae suspending it as an issuer of mortgage-backed securities and a mortgage servicer.

Freddie Mac (FRE) said its additional losses related to the bankruptcy of Taylor, Bean & Whitaker Mortgage Corp. could be "significant."

At the end of September, the giant mortgage lender, which federal regulators took control of a year ago, estimated its potential exposure related to Taylor Bean's loan repurchase obligations at $500 million.

Freddie recently said in a filing with the Securities and Exchange Commission that it is working with the debtor in possession, the Federal Deposit Insurance Corp. and other creditors to quantify its other exposures related to Taylor Bean.

"At this time, Freddie Mac is unable to estimate its total potential exposure related to TBW's bankruptcy; however, the amount of additional losses related to such exposures could be significant," the filing said.

Taylor Bean was one of the largest independent home-loan providers before it closed its mortgage-lending operation.

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About Multi Capital LLC

Multi Capital, Inc. ( is a nationwide finance company specializing in the full spectrum of real estate financing. Multi Capital is known for its expertise in arranging Senior Debt, Mezzanine, and Equity for Development Deals. With its financing experts originating from the real estate development arena, Multi has the expertise needed to syndicate these transactions.

Multi Capital provides a service that is unmatched in efficiency, speed, and thoroughness. Multi currently has over $600,000,000 in development deals in the pipeline.