CoreLogic's latest data on distressed residential real estate in the Nashville area shows little change from December's numbers. That's a positive change from the past two post-recession turns of the calendar: In the first months of 2010 and 2011, the 90-day mortgage delinquency rate jumped 16 and 17 basis points, respectively. Likewise, the foreclosure rate jumped 8 and 7 basis points in those years.
After climbing slowly but steadily from last spring through October, the foreclosure rate in the Nashville MSA fell noticeably in late 2011, says research firm CoreLogic. December's number was 1.74 percent, which was 16 basis points below October's and 15 points lower than that of the year before.
SEE ALSO: December's foreclosures by ZIP code
So just how bad were things at Tennessee Commerce? One quick way to analyze the state of affairs there is to compare how much its failure will cost the Federal Deposit Insurance Fund relative to the bank's size. Since the beginning of November, regulators have closed down 13 other lenders with Sept. 30 deposits of $2.37 billion. Those failures will cost the FDIC's deposit insurance fund $650 million, which amounts to 27.5 percent of deposits. But when it comes to Tennessee Commerce, the FDIC fund is paying $417 million, which comes to 36.1 percent of the bank's Sept. 30 deposits.
Sales of foreclosed properties in Tennessee fell by more than a third in the third quarter of 2011, research firm RealtyTrac reported Thursday morning. That drop is much steeper than that of the national average and trailed only New York and New Jersey in that category. (RealtyTrac officials say the national drop of almost 5 percent from a year earlier is due in part to legal uncertainties that have constrained demand.)
And while foreclosure sales made up only 9 percent of the state's total market in Q3 — versus 20 percent for the country — the discounts sellers had to swallow were much bigger. On average, the price discount of a foreclosed home was more than 41 percent versus 34 percent nationally.
Struggling business lender Tennessee Commerce Bancorp on Friday afternoon told investors it has set aside another $29 million to reserve against possible losses in a number of its loan portfolios. The bank's management, led by CEO Mike Sapp and CFO Frank Perez, also is reviewing a forensic review of Tennessee Commerce's small-ticket specialized equipment portfolio that may lead to more write-downs. As a result, auditor KraftCPAs has withdrawn its opinion of the bank's past reported numbers.
Bank execs and state and federal regulators have been taking a fine-tooth comb to Tennessee Commerce's books for several months and this latest round of set-asides — more than $22 million for small-ticket equipment loans, $4 million for conventional commercial and industrial credits and $2.7 million for anticipated real estate losses — comes almost three months after regulators forced Sapp & Co. to take charges of some $90 million to cover potential losses. Since then, state and federal deadlines to raise the bank's capital ratios have come and gone. Officials say they continue to explore all options for doing so. If they're not successful, the Federal Deposit Insurance Corp. will likely decide the bank's future as receiver or conservator.
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