Unofficial Count 584

That's the unofficial count of Problem Banks in Financial Trouble in America right now. There are 584 insitutions that are under some sort of Federal Notice, from "Cease and Desist" to "Formal Agreements". Their combined cost estimate to cover the banks depositors is $305.3 Billion Dollars.

On Friday Jan. 22, 2010, 5 more Banks were taken over by the Feds in one day, bringing the total to 9 so far this year alone. I think this is staggering news about the solvency of the banking community still. True, most of these banks are small to midranged but California had 34 Banks alone on the list and these banks aren't part of the stimulus package or TARP, so this money is in addition to stimulus money.

This is one reason that the credit markets have made all loans more difficult to obtain. Most of these small to midsized banks are community oriented, meaning they made loans to buisness and commercial real estate as well as residential real estate. This is a direct compenent of the looming Commerical Real Estate market crash that have heard about, and these problems are beginning to show it. Some problem banks made commercial loans that are likely to have as much as 1/3 or more of loans going bad. If this trend continues there is going to be a crash in the commercial real estate market very soon.

So with 584 Banks in trouble and their loans likely to have a high amount of defaults, how many more banks, not on the list, are tetering on the brink of trouble now? I'll bet that number is frightning! Those unkown variables could be the difference between a second Market Crash or wheter we squeak on by, if we're very lucky! One thing is for sure, I'll bet lending will still be difficult for both the commercial and residential markets, and credit could freeze up again. Either way it looks like a very bumpy road ahead for banking, loans, commercial and residential real estate.