Inadequate Loan Loss Reserves: You Read It Here First
June 30th, 2011
By David Goldman
“Bad Mortgages Weigh on Banks” is the headline of Nick Timiraos’ WSJ report that nearly 20% of US banks’ mortgage holdings are delinquent.
U.S. banks hold a much higher rate of defaulted mortgages on their books than do mortgage giants Fannie Mae and Freddie Mac, according to a report issued Wednesday by the Office of the Comptroller of the Currency, which regulates national banks.
The report said 19.7% of mortgages in banks’ portfolios were delinquent at the end of March. By contrast, nearly 6.8% of mortgages backed by Fannie and Freddie were nonperforming, as were 11.4% of all mortgages.